One of the most prominent advocates of Bitcoin in the corporate world is Michael Saylor, the CEO of MicroStrategy, a business intelligence software company. Saylor has been vocal about his belief that Bitcoin is the ultimate store of value and a hedge against inflation. He has also led his company to invest heavily in Bitcoin, buying more than 100,000 coins since August 2020.
However, not everything is rosy for MicroStrategy and its Bitcoin bet. According to a recent report by Bloomberg, the company currently has a $520 million unrealized loss on its Bitcoin investment, as the price of the cryptocurrency has fallen sharply from its all-time high of nearly $65,000 in April 2021. As of September 26, 2021, Bitcoin was trading at around $43,000, which means that MicroStrategy’s average cost of $26,080 per coin is higher than the current market value.
This does not seem to deter Saylor from his bullish stance on Bitcoin. He has repeatedly stated that he is not concerned about the short-term volatility of the market, and that he views Bitcoin as a long-term asset that will appreciate over time. He has also said that he plans to buy more Bitcoin whenever he can, and that he will not sell any of his holdings.
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Saylor’s confidence in Bitcoin may be admirable, but it also exposes his company to significant risks. MicroStrategy’s balance sheet is now heavily dependent on the performance of Bitcoin, which is notoriously unpredictable and volatile. The company also faces regulatory uncertainty, as some governments around the world are cracking down on cryptocurrencies or imposing stricter rules on their use and taxation. Moreover, MicroStrategy may face competition from other companies that are also investing in Bitcoin or other digital assets, such as Tesla, Square, or Coinbase.
MicroStrategy’s Bitcoin investment may turn out to be a brilliant move in the long run, if Saylor’s vision of Bitcoin becoming a global reserve asset comes true. However, in the short term, the company may have to endure more losses and challenges as it navigates the turbulent waters of the crypto market.
Bitcoin mining rig maker Bitmain plans to invest $54 million in bankrupt Core Scientific
Bitmain, one of the world’s largest manufacturers of cryptocurrency mining hardware, has announced that it will invest $54 million in Core Scientific, a US-based company that filed for bankruptcy in July. The investment is part of Bitmain’s strategy to expand its presence and influence in the North American market, where it faces stiff competition from other players such as MicroBT and Canaan.
According to a press release, Bitmain will acquire a 9.9% stake in Core Scientific, which will continue to operate as an independent entity under the leadership of its current CEO, Mike Levitt. Core Scientific is one of the largest providers of blockchain hosting and digital asset mining services in North America, with over 70,000 mining machines and 300 megawatts of power capacity across four states.
The deal will also strengthen the partnership between Bitmain and Core Scientific, which have been collaborating since 2019. Core Scientific is the largest customer of Bitmain’s Antminer series of mining rigs, and also offers repair and maintenance services for Bitmain’s products in North America. Bitmain said that it will leverage Core Scientific’s expertise and infrastructure to provide better service and support to its customers in the region.
Bitmain’s investment in Core Scientific comes at a time when the global cryptocurrency mining industry is undergoing a major shift, following China’s crackdown on mining activities earlier this year. Many miners have relocated their operations to other countries, such as the US, Canada, Kazakhstan, and Russia, where they can access cheaper and more reliable sources of energy. Bitmain said that it is committed to supporting the growth and development of the mining ecosystem in North America, which it considers to be one of the most important markets for its business.
