• About
  • Landing Page
  • Buy JNews
SB Crypto Guru News- latest crypto news, NFTs, DEFI, Web3, Metaverse
  • HOME
  • BITCOIN
  • CRYPTO UPDATES
    • GENERAL
    • ALTCOINS
    • ETHEREUM
    • CRYPTO EXCHANGES
    • CRYPTO MINING
  • BLOCKCHAIN
  • NFT
  • DEFI
  • WEB3
  • METAVERSE
  • REGULATIONS
  • SCAM ALERT
  • ANALYSIS
No Result
View All Result
  • HOME
  • BITCOIN
  • CRYPTO UPDATES
    • GENERAL
    • ALTCOINS
    • ETHEREUM
    • CRYPTO EXCHANGES
    • CRYPTO MINING
  • BLOCKCHAIN
  • NFT
  • DEFI
  • WEB3
  • METAVERSE
  • REGULATIONS
  • SCAM ALERT
  • ANALYSIS
No Result
View All Result
SB Crypto Guru News- latest crypto news, NFTs, DEFI, Web3, Metaverse
No Result
View All Result

MicroStrategy’s Bitcoin Bet Raise Red Flags As Crypto Prices Drop, Report

SB Crypto Guru News by SB Crypto Guru News
August 2, 2024
in Bitcoin
0 0
0
MicroStrategy’s Bitcoin Bet Raise Red Flags As Crypto Prices Drop, Report


Four years ago, MicroStrategy co-founder and Chairman Michael Saylor, turned to Bitcoin as a way to invest the company’s excess cash rather than traditional assets like short-term Treasuries. This decision has transformed the software firm into the largest corporate holder of the largest cryptocurrency on the market, with a Bitcoin stockpile now worth nearly $15 billion.

However, as analysts are starting to pay closer attention, a new question has emerged: can MicroStrategy’s underlying enterprise software business keep pace with its rapidly growing Bitcoin holdings?

MicroStrategy May Pause Bitcoin Purchases

According to a Bloomberg report, revenue from MicroStrategy’s software operations has stagnated in recent quarters, even as the value of its Bitcoin investments has surged. This has raised concerns about the company’s ability to cover the incremental interest expense associated with the convertible debt it has issued to fund its Bitcoin purchases.

Lance Vitanza, an analyst at TD Cowen, emphasized the importance of ensuring that MicroStrategy’s cash flows can cover the interest expenses associated with the convertible debt issued by the company. Vitanza’s analysis suggests that any underperformance in the software business could leave “little margin for error.”

Vitanza estimates that MicroStrategy has about $45 million in interest expense and $20 million in cash taxes this year, against around $82 million in earnings before items such as taxes. This tight cash condition, he says, could prompt the company to hold off on issuing additional debt to buy more Bitcoin until next year.

To fund its Bitcoin acquisitions, MicroStrategy has leveraged various avenues beyond operational cash flow, including issuing over $2 billion in convertible notes this year. 

Quarterly Losses Loom

Cash flow could also be affected by an accounting change coming next year that requires MicroStrategy to value its digital assets to market. The company has warned that it may need to pay a 15% corporate alternative minimum tax if its average annual adjusted financial statement income for any consecutive three-tax-year period preceding the tax year exceeds $1 billion.

“If we become subject to these new taxes under the IRA for these or any other reasons, it could materially affect our financial results, including our earnings and cash flow, and our financial condition,” the company said in a recent filing.

Despite these concerns, MicroStrategy’s shares have surged 156% this year, outperforming the roughly 50% jump in BTC’s price during the same period. 

However, the company is expected to post a quarterly loss of 78 cents per share, and may need to record an impairment charge on its Bitcoin stash, which could make it unprofitable for 12 of the 16 quarters since it started buying Bitcoin.

At the time of writing, BTC is trading at $64,200, down over 3% in the last 24 hours, causing a correction in the majority of the top 100 cryptocurrencies by market capitalization list. 

MicroStrategy
The 1D chart shows BTC’s price drop over the last 24 hours. Source: BTCUSDT on TradingView.com

Featured image from DALL-E, chart from TradingView.com



Source link

Tags: BetBitcoinBitcoin NewsCryptoCrypto NewsCrypto UpdatesDropFlagsLatest News on CryptoMicroStrategysPricesraiseRedReportSB Crypto Guru News
Previous Post

Big XR News from Meta, NVIDIA, Luminous, Microsoft

Next Post

Crypto.com Surpasses Coinbase in Trading Volume

Next Post
Crypto.com Surpasses Coinbase in Trading Volume

Crypto.com Surpasses Coinbase in Trading Volume

  • Trending
  • Comments
  • Latest
How to Get Token Prices with an RPC Node – Moralis Web3

How to Get Token Prices with an RPC Node – Moralis Web3

September 3, 2024
The Metaverse is Coming Back! – According to Meta

The Metaverse is Coming Back! – According to Meta

February 7, 2025
NFT Rarity API – How to Get an NFT’s Rarity Ranking – Moralis Web3

NFT Rarity API – How to Get an NFT’s Rarity Ranking – Moralis Web3

September 6, 2024
AI & Immersive Learning: Accelerating Skill Development with AI and XR

AI & Immersive Learning: Accelerating Skill Development with AI and XR

June 4, 2025
Meta Pumps a Further  Million into Horizon Metaverse

Meta Pumps a Further $50 Million into Horizon Metaverse

February 24, 2025
Chiliz Chain Deep Dive – Why Build on Chiliz Chain? – Moralis Web3

Chiliz Chain Deep Dive – Why Build on Chiliz Chain? – Moralis Web3

September 10, 2024
US Secret Service Trains 60+ Nations to Track Crypto Scams With Blockchain Tools

US Secret Service Trains 60+ Nations to Track Crypto Scams With Blockchain Tools

0
The Leader of Late Capitalism: Michael Saylor’s  Billion Flex Will Haunt You at 0 | by Chip Mahoney | The Capital | Jul, 2025

The Leader of Late Capitalism: Michael Saylor’s $14 Billion Flex Will Haunt You at $500 | by Chip Mahoney | The Capital | Jul, 2025

0
Art’s new hybrid economy: who is making creative waves in a sector where analogue and digital media exist together? – The Art Newspaper

Art’s new hybrid economy: who is making creative waves in a sector where analogue and digital media exist together? – The Art Newspaper

0
Bitcoin Crash? That’s Exactly What ‘Poor Dad’ Kiyosaki Is Hoping For

Bitcoin Crash? That’s Exactly What ‘Poor Dad’ Kiyosaki Is Hoping For

0
Dogwifhat up 20% in 7 days as Solana meme coin regains momentum

Dogwifhat up 20% in 7 days as Solana meme coin regains momentum

0
Zafin Unveils Transaction Enrichment to Transform Data into Actionable Insights

Zafin Unveils Transaction Enrichment to Transform Data into Actionable Insights

0
US Secret Service Trains 60+ Nations to Track Crypto Scams With Blockchain Tools

US Secret Service Trains 60+ Nations to Track Crypto Scams With Blockchain Tools

July 7, 2025
Analysts Predict Rally Alongside Real-World Adoption

Analysts Predict Rally Alongside Real-World Adoption

July 6, 2025
The Leader of Late Capitalism: Michael Saylor’s  Billion Flex Will Haunt You at 0 | by Chip Mahoney | The Capital | Jul, 2025

The Leader of Late Capitalism: Michael Saylor’s $14 Billion Flex Will Haunt You at $500 | by Chip Mahoney | The Capital | Jul, 2025

July 6, 2025
Ethereum Reserves On Binance Hits 2023 Level — What Happened Last Time?

Ethereum Reserves On Binance Hits 2023 Level — What Happened Last Time?

July 6, 2025
Bullish Bitcoin Bets Soar on Prediction Markets, 0K in Sight

Bullish Bitcoin Bets Soar on Prediction Markets, $150K in Sight

July 6, 2025
Bitcoin Crash? That’s Exactly What ‘Poor Dad’ Kiyosaki Is Hoping For

Bitcoin Crash? That’s Exactly What ‘Poor Dad’ Kiyosaki Is Hoping For

July 6, 2025
SB Crypto Guru News- latest crypto news, NFTs, DEFI, Web3, Metaverse

Find the latest Bitcoin, Ethereum, blockchain, crypto, Business, Fintech News, interviews, and price analysis at SB Crypto Guru News.

CATEGORIES

  • Altcoin
  • Analysis
  • Bitcoin
  • Blockchain
  • Crypto Exchanges
  • Crypto Updates
  • DeFi
  • Ethereum
  • Metaverse
  • Mining
  • NFT
  • Regulations
  • Scam Alert
  • Uncategorized
  • Web3

SITE MAP

  • Disclaimer
  • Privacy Policy
  • DMCA
  • Cookie Privacy Policy
  • Terms and Conditions
  • Contact us
  • Disclaimer
  • Privacy Policy
  • DMCA
  • Cookie Privacy Policy
  • Terms and Conditions
  • Contact us

© 2025 JNews - Premium WordPress news & magazine theme by Jegtheme.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • HOME
  • BITCOIN
  • CRYPTO UPDATES
    • GENERAL
    • ALTCOINS
    • ETHEREUM
    • CRYPTO EXCHANGES
    • CRYPTO MINING
  • BLOCKCHAIN
  • NFT
  • DEFI
  • WEB3
  • METAVERSE
  • REGULATIONS
  • SCAM ALERT
  • ANALYSIS

© 2025 JNews - Premium WordPress news & magazine theme by Jegtheme.