Nearly 130,000 Bitcoins fall below cost basis! MicroStrategy: No plans to sell any Bitcoin

Despite Bitcoin's drop of over 50% from its all-time high, MicroStrategy CFO Andrew Kang stated on 5/18 in the United States: "We will not sell Bitcoin, the strategy of long-term buying and holding Bitcoin will not change."

Losses Will Be Reflected in Financial Reports

MicroStrategy has considerable experience in incorporating Bitcoin into its financial reports. In the past, they even offered courses to teach companies how to purchase digital assets and include them in financial statements. However, digital assets are not treated as separate items under the fair value accounting principles, but are classified as intangible assets. For example, in the case of Bitcoin, MicroStrategy must record a decrease in value based on market value, but gains are only recognized when the assets are sold. As MicroStrategy's average cost has shown losses, these will also be reflected in their financial reports.

Analysts at financial services company Jefferies Group commented that MicroStrategy should improve the operations of its software business in order to sustainably continue acquiring more Bitcoin. Despite having a Bitcoin investment strategy, it appears that it is not benefiting the company financially.

With President Biden's cryptocurrency regulatory framework team in place, the Financial Accounting Standards Board (FASB) will discuss adding accounting guidelines for cryptocurrencies as an agenda item. This development has encouraged MicroStrategy. If Bitcoin prices rise in the future, it will be advantageous for MicroStrategy's financial reporting under the fair value accounting principles.