MicroStrategy Adds 2,500 Bitcoin To Holdings Despite Tax-Loss Harvesting

The tech company led by Michael Saylor has increased its bitcoin holdings by 2,500 BTC despite selling bitcoin for the first time to generate a tax benefit.

• Michael Saylor’s MicroStrategy bought 2,395 BTC for $42.8 million in cash between Nov. 1 and Dec. 21, 2022.
• It then sold 704 BTC at a loss on Dec. 22 to offset previous capital gains.
• MicroStrategy then bought 810 BTC on Dec. 24.

Software analytics company MicroStrategy has sold bitcoin for the first time since it first began adding the digital currency to its treasury in 2020.

The sale took place on December 22, 2022, according to a filing with the U.S. Securities and Exchange Commission (SEC). The move was carried out in order to generate a net tax benefit, as the losses involved in the sale are able to offset previous capital gains, per the filing. Two days later, MicroStrategy bought back more bitcoin than it sold, however at a higher price –– $16,845 per BTC on the 810 bitcoin purchase vs. $16,776 on the 704 bitcoin sale.

A larger purchase preceded the sale. MicroStrategy bought 2,395 bitcoin between November 1 and December 21, 2022, before embarking on the tax-loss harvesting strategy. The purchase cost about $42.8 million, translating to an average price of $17,871 per bitcoin, inclusive of fees and expenses.

Ultimately, the transactions resulted in an increase of MicroStrategy’s bitcoin holdings by 2,500 BTC. The company led by Michael Saylor now holds 132,500 BTC, acquired for about $4.03 billion at an average price of $30,397 per bitcoin. As a result, the Virginia-based firm currently faces an unrealized loss of over $1.8 billion.