Strategy sits on $1.4 billion profit on bitcoin holdings as price surges
Strategy Inc. has reached a $1.4 billion profit on its bitcoin holdings as the cryptocurrency's price surged past $77,000. The company is also actively repurchasing its preferred stock to restore value.
Why it matters
This demonstrates the significant impact of cryptocurrency price volatility on corporate balance sheets and market valuation.
The company owns 840,447 BTC, acquired at an average price of $75,385, compared with bitcoin’s current price of about $77,000.
Strategy had been sitting on an unrealized loss for much of the year as the price of the largest cryptocurrency fell roughly 54% from its October all-time high of $126,000. The company’s common stock rose 10% in Friday pre-market trading to $120, its highest level in two months.
Bitcoin traded in the low to mid-$60,000s for much of the past few months, a period during which Strategy sold around 6,916 BTC. The company has also increased its U.S. dollar reserve to $4.8 billion , providing 2.8 years of coverage for dividend payments and other obligations.
When bitcoin traded as low as $58,000 back in July, that unrealized loss was about $13 billion, equivalent to 20.4% of the company’s total bitcoin cost basis.
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