MicroStrategy sells bitcoin for first time, still a net buyer
NEW YORK: MicroStrategy Inc, the enterprise-software firm better known in recent years as the largest corporate buyer of bitcoin, announced a series of transactions including its first ever sale of the token.
The company remains a net buyer.
In a filing, MicroStrategy said it acquired about 2,395 bitcoin between the start of November and Dec 21 through its MacroStrategy subsidiary, paying roughly US$42.8mil (RM189.5mil) in cash.
It then sold 704 of the tokens on Dec 22 for a total of around US$11.8mil (RM52.2mil), citing tax purposes, before buying 810 more of them two days later.
“MicroStrategy plans to carry back the capital losses resulting from this transaction against previous capital gains,” the company said to explain the Dec 22 sale.
This “may generate a tax benefit,” MicroStrategy said in its filing.
Because cryptocurrencies largely aren’t deemed securities, there are no crypto-specific “wash rules” that would apply to the market, said Sean Farrell, head of digital-asset strategy at Fundstrat, who doesn’t work on tax implications directly but tracks the space closely.
“So we’re operating in this world in which, for lack of a better word, it’s a loophole where if you are sitting on a position below cost, you are able to sell that position and immediately re-buy those assets at the same spot price,” he said in an interview.
“That’s essentially what MicroStrategy is trying to do to optimise their holdings and help obtain some tax relief.”
All in, MicroStrategy held about 132,500 bitcoin worth more than US$4bil (RM17.7bil) as of Dec 27. The firm paid an average purchase price of US$30,397 (RM134,568) per bitcoin.
Bitcoin on Wednesday traded at around US$16,650 (RM73,710), having lost more than 60% for the year, a decline that puts it on pace for one of its worst annual stretches on record.
“There is no change to our bitcoin strategy, which is to acquire and hold bitcoin for the long term,” said Shirish Jajodia, head of investor relations and treasury at MicroStrategy.
MicroStrategy had over the pandemic years become well known for its bitcoin acquisitions, led largely by its charismatic chief executive officer Michael Saylor. — Bloomberg
