MicroStrategy Inc.’s purchase of nearly 130,000 bitcoins at a cost of about $3.97 billion over the past two years is taking a toll on the software firm’s balance sheet as the value of bitcoin has plummeted, Bloomberg reports.
As of March 31, 2022, the company had paid an average of $30,700 for each bitcoin purchased over the prior two years, Bloomberg reported, citing federal Securities and Exchange Commission documents.
On Monday (June 13), the value of bitcoin fell as much as 17 percent, according to Bloomberg, putting the value of each MicroStrategy bitcoin at about $22,603.
Bitcoin’s drubbing on Monday was sparked by news that cryptocurrency lender Celsius Network Ltd. was freezing withdrawals, swaps and transfers on its platform, Bloomberg and other news organizations reported.
With cryptocurrency-related stocks taking a hammering on Monday, MicroStrategy shares fell 25 percent to close at $152.15, according to Bloomberg.
The day before the Tysons Corner, Virginia-based company announced its program of purchasing cryptocurrency, the business was valued at $1.2 billion, Bloomberg reported.
The Wall Street Journal reported that MicroStrategy had converted all its cash to bitcoin and issued debt to buy more.
Bloomberg on Monday (June 13) cited a Tweet from MicroStrategy founder and Chief Executive Michael Saylor that reads: “In #Bitcoin we trust.”
Experts cited in articles on PYMNTS.com attributed the plunging value in cryptocurrencies to rising inflation. One analyst reportedly told CNBC: “We could see much lower bitcoin prices over the next month or two.”
Read more: Crypto Nosedives Following Celsius Collapse
The Wall Street Journal reported today (June 13) that another factor in the decline of bitcoin’s value is the increasingly strong correlation between the value of bitcoin and that of other risky assets such as technology stocks.
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