The company MicroStrategy has made a profit of 1 billion euros in just a few weeks. Behind it lies a risky investment.
The software company MicroStrategy has been investing a lot of money for several years. But these investments seem to be paying off right now. With its strategy, it has now made a profit of one billion euros.
Company has been investing in the cryptocurrency Bitcoin for years
Which company is it? The company MicroStrategy is an American, internationally operating software manufacturer with around 2,600 employees worldwide and an annual turnover of about 450 million U.S. dollars. That’s about 420 million euros.
In recent years, MicroStrategy has repeatedly invested heavily in Bitcoin. Although the prices for Bitcoin fluctuated significantly over the past years, the company continued to spend a lot of money on Bitcoin, making the whole endeavor a risky investment. But it has paid off:
By now, the company has accumulated a total of nearly 158,400 bitcoins, making MicroStrategy the fourth largest Bitcoin holder.
What does it look like currently? According to our colleagues from Jeuxvideo.com, MicroStrategy is said to have purchased the bitcoins at an average price of 29,587 U.S. dollars. However, at the beginning of October, the Bitcoin price rose sharply and is now over 32,000 U.S. dollars.
According to data from lookonchain, MicroStrategy has achieved a profit of around 1.1 billion U.S. dollars from its Bitcoin investments in just two weeks. This is roughly equivalent to about 1 billion euros.
Company cannot simply spend the billion profit
What does the company do with all the money? First of all, it is not so easy to convert profits from Bitcoin into “real” money. Because Bitcoin is not cash that you can spend at the supermarket around the corner or order a pizza.
There are further problems: If the company were to sell such a large sum of bitcoins now, it would likely disturb the market significantly and also drive the price of Bitcoin down sharply. This could also lead to the company losing large amounts that it has only recently accumulated.
What happens next? According to various statements, MicroStrategy does not want to sell its bitcoins, but rather sees them as a long-term investment. This currently seems to be the best method, but it’s not certain. Because Bitcoin is a risky investment and the company could also lose a lot of money due to the strong fluctuations of Bitcoin.
And MicroStrategy would not be the first company that could lose a lot of money through cryptocurrencies and even go bankrupt:
Crypto bank is missing 1 billion euros and closes – ‘I managed to ruin my life’
