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MicroStrategy Inc. has seen the value of its Bitcoin investment double to $6.7 billion due to the excitement surrounding the impending launch of Bitcoin ETFs, making it one of the biggest beneficiaries of the news.

Increasing its Bitcoin investment by twofold

MicroStrategy had officially purchased 114,042 Bitcoin for a total of $3.16 billion. At the time of purchase, the average price of each Bitcoin was $27,713, which included all fees and expenses.

MicroStrategy had paid approximately $242.9 million for an additional 5,050 bitcoin. MicroStrategy paid $419.9 million for 8,957 bitcoin in the third quarter of 2021, with the average price of each bitcoin being around $46,87. Their investment is now worth $6.7 billion, and the current price of Bitcoin has surpassed $60,000 as it approaches record highs on Friday.

Bitcoin bet by MicroStrategy

Michael Saylor, the founder, and CEO of MicroStrategy, began purchasing Bitcoin in August 2020. At the time, he stated that holding Bitcoin on MicroStrategy’s balance sheet would be preferable to holding cash or low-yielding US securities, which was the standard practice among most companies.

However, according to MicroStrategy, other companies such as Tesla and Square followed suit, causing Bitcoin’s price to reach a record high in April before falling again.

Bitcoin is still regarded as an intangible asset

While MicroStrategy has profited $3.54 billion since its investment, non-investment firms like MicroStrategy must report Bitcoin as an intangible asset. This means that Bitcoin will be recorded on the company’s balance sheet at its historical cost, and its value may be impaired if its value falls.

However, if the value of Bitcoin rises, it cannot be revised. MicroStrategy has already sent a letter to the Financial Accounting Standards Board, stating,

“This disconnect between an entity’s financial statements and the economic reality of its financial condition and results of operations creates confusion and fails to provide investors, analysts, and the general public with the information they need to make an informed assessment of an entity’s current and future prospects.”

The meteoric rise of Bitcoin

Bitcoin surpassed $60,000 for the first time since April as traders became more optimistic about the SEC’s approval of the first-ever bitcoin futures exchange-traded fund. If the SEC approves the ETF, it will provide mainstream investors with significant exposure to Bitcoin, marking a watershed moment in the cryptocurrency industry.

The Securities and Exchange Commission is set to approve the first US Bitcoin futures exchange, which will begin trading next week, marking a watershed moment in the crypto space.

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