Saylor says ‘Bitcoin is winning,’ deems gold a 19th century solution as MicroStrategy outperforms major asset classes

MicroStrategy (MSTR) Medium 3rd Quarter Financial Results BriefingExecutive Chairman Michael Thaler said Bitcoin was winning and it is boosting the company’s fortunes.

“Bitcoin is winning, but MicroStrategy is currently beating Bitcoin, thanks to the long-leverage Bitcoin strategy we pursued.”

MicroStrategy is Bitcoin’s largest public company holder with 130,000 tokens with a market value of $2.655 billion based on current prices.

Since first announcing its BTC strategy in 2020, the company has faced criticism that its BTC-heavy approach puts shareholders at risk and distracts them from the company’s core software business.

Nonetheless, release of third-quarter earnings report boosts MicroStrategy share price 3%However, MSTR remains down 51% since the beginning of the year. Similarly, Bitcoin is down 56% year-to-date.

Bitcoin outperforms other asset classes

Perhaps to dispel criticism of the company’s investment strategy, Thaler focused on the period since Bitcoin was first added to the Treasury during the call.

He said that since August 11, 2020, MSTR has “outperformed all major asset classes it benchmarks.” He later adds that these benchmarks include all major technology and enterprise software stocks.

“As you can see from this chart, as of 4pm yesterday, October 31st, we are up 116% since we launched this strategy.”

Similarly, he noted that Bitcoin has risen 72% since August 2020. The S&P and Nasdaq grew 15% and 0%, respectively, over the same period.

As far as gold is concerned, Thaler said gold fell 19%, and in retrospect justified MicroStrategy’s decision to prioritize BTC over precious metals to sustain wealth in a volatile macro environment.

“Gold is the 19th century hard money solution and Bitcoin is the 21st century hard money asset.”

Impairment charge

MicroStrategy’s digital assets do not reflect market value, based on the accounting standard that “perpetual intangible assets” such as Bitcoin should be recorded at impaired value without reflecting subsequent unrealized gains. .

The difference consists of an impairment charge. Given Bitcoin’s relative stability during the third quarter, BTC’s impairment charges this quarter were $700,000, the lowest since adopting BTC as a national treasury asset.

CFO Andrew Kang Acquisition of an additional 301 BTC this quarter reaffirms the company’s commitment to its financial strategy, it said.

In addition, Kang also noted ongoing discussions with the Financial Accounting Standards Board on changing the handling of Bitcoin to a “fair valuation” standard.

Mr Kang said the adoption of fair value accounting standards will encourage further institutional adoption.

“If ultimately adopted and implemented, we believe fair value is based on fair value.make the ride more comfortable Facilitate additional adoption based on current adverse intangible asset accounting treatment applied to Bitcoin holdingsAccidental Adoption of Bitcoin as an asset class. ”