Saylor's MicroStrategy Bitcoin Bag Balloons By $900M: Could Ethereum Have Been The Better Bet?

Business intelligence firm MicroStrategy Inc MSTR has reported a substantial paper gain of $900 million on its stack of 158,400 Bitcoin BTC/USD, profiting from the recent surge in Bitcoin’s price and fueled by optimism surrounding the potential approval of spot Bitcoin exchange-traded funds (ETFs).

What Happened: As of now, Bitcoin is trading above $35,400. The apex cryptocurrency has confidently surpassed the $35,000 resistance level, which had previously limited its upward movement over the past two weeks.

Since the third quarter, MicroStrategy, founded by Michael Saylor, has added 6,067 Bitcoin (BTC) to its holdings, with another 155 acquired in October, according to the company’s November 1 results filing. 

Although the firm’s revenue increased by 3% year-on-year to $129.5 million over the quarter, it recorded a net loss of $143.4 million. Notably, digital asset impairment losses and income taxes accounted for $33.6 million and $109.6 million of the total net losses, respectively.

During the third quarter (July 1 to September 30), while Bitcoin experienced a price decline of 11.5% from $30,480 to $26,970, MicroStrategy capitalized on this downward period by purchasing the 6,067 BTC at an average price of $27,590.

Currently, MicroStrategy’s BTC holdings amount to 158,245 BTC, with an original investment of $4.715 billion. The current value of the holdings stands at $5.640 billion, reflecting a 20% increase. However, had MicroStrategy invested the same amount in Ethereum ETH/USD, they would now possess 3,971,678 ETH, resulting in a value of $7.40 billion, significantly higher than the current BTC holdings, data from blockchaincenter.net shows.

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Why It Matters: Considering staking as an alternative approach, MicroStrategy could have earned 387,460 ETH at a 4% return. This ETH would be worth approximately $722.4 million, bringing the total value (with staking) to 4,359,138 ETH, equivalent to $8.127 billion.

While MicroStrategy continues to benefit from the rise in Bitcoin’s value, the narrative raises the question of what might happen if the company were to invest in ETH at the present moment. If MicroStrategy were to trade its BTC for ETH, it could potentially hold 3,025,059 ETH. Moreover, the annual revenue from staking this amount would amount to approximately $282 million, showcasing the significant potential returns that could be achieved.

Price Action: At the time of writing, Bitcoin was trading at $35,728.12,  up 3.66% in the last 24 hours, according to Benzinga Pro.

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