Despite $27M Loss, MicroStrategy Records Improved Q3 As Bitcoin Holds Steady

The firm plans to continue buying and holding bitcoin after its digital asset impairment charges plummeted quarter-over-quarter


Blockworks Exclusive Art by Axel Rangel


Despite posting a net loss for the third quarter, MicroStrategy booked a dramatic improvement from the preceding three months amid muted bitcoin volatility. 

MicroStrategy executives said during an earnings call Tuesday that the firm plans to continue buying and holding bitcoin, with no plans to sell.   

The Virginia-based business intelligence firm reported a net loss of $27 million in the third quarter — a drastic improvement from its $1.1 billion net loss in the prior three-month period. 

MicroStrategy’s digital asset impairment charges — which comes into play if the market value of bitcoin decreases below the market-adjusted purchase value of the firm’s  — were $700,000 during the third quarter, compared to $918 million in the second. 

The company’s stock was up 5.8% in early after-hours trading in New York. MicroStrategy is down roughly 54% on the year.

The largest publicly traded corporate owner of bitcoin (BTC), MicroStrategy holds 130,000 bitcoins after buying 301 BTC during the third quarter. The value of those bitcoin holdings, as of Sept. 30, was nearly $2 billion, reflecting cumulative impairment losses of about $2 billion since their purchase.

“In terms of a potential, more severe macro downturn, I think we do not have any plans to adjust our bitcoin strategy,” Chief Financial Officer Andrew Kang said on the earnings call. “We do, as we always have, view our investment as a long-term view, importantly through cycles…and we will continue to believe in that core principle.”

MicroStrategy Executive Chair Michael Saylor said bitcoin volatility has improved in recent months. The asset’s volatility dipped below that of the Nasdaq and the S&P 500 equity indexes for the first time since 2020, according to Kaiko data.

“That’s really bullish for the asset class, and auspicious,” Saylor said.

Firm execs don’t address alleged tax evasion 

The third quarter results come as MicroStrategy and Michael Saylor are defendants in a lawsuit launched by the attorney general for Washington, DC.

Attorney General Karl Racine alleged in September that Saylor personally illegally avoided more than $25 million of DC taxes over about a decade by claiming to be a resident of other jurisdictions, including Florida. Racine also alleged that MicroStrategy conspired in the tax evasion.

Douglas Gansler, a partner at Cadwalader, Wickersham & Taft — the law firm whistleblowers first came to — told Blockworks the damages could total roughly $165 million.

Saylor, in a statement sent to Virginia Business in September, said he “respectfully disagrees” with the tax fraud allegations, while MicroStrategy said in a statement that the claims against the company are “false.” Eugene Scalia, a partner in the DC office of Gibson, Dunn & Crutcher and former US secretary of labor, was set to represent Saylor in the suit.

Company executives did not comment on the lawsuit during the call. 

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

MON - WED, MARCH 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience:  Attend expert-led panel discussions and fireside chats  Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts   Grow your network […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Frax report cover.jpg


Frax saw continued development in its frxETH liquid staking derivative and Fraxlend money market throughout 2023. Frax V3 introduces an RWA strategy to drive utility to the protocol's cornerstone product, the FRAX stablecoin.


MicroStrategy discloses the purchase of 16,000 bitcoin throughout November


Digital asset firms face potential new regulatory landscape under Treasury’s proposed authority expansion


Uniswap Labs will be providing trading APIs to Talos investors through Fireblocks


DYDX supply will climb by up to 80% after the Friday unlock, but a couple factors make a massive sell-off appear unlikely


Switzerland-based Pando Asset, which has crypto products trading on the SIX Swiss Exchange, now looks to the US


Binance does not hold the required licenses to advertise and serve customers in the Philippines, the country’s securities regulator said