Top Analyst Explains The MicroStrategy Of BTC Selling In 2022

Michael Saylor, the founder and executive chairman of MicroStrategy, explains why the software business sold some Bitcoin (BTC) despite having previously said it wouldn’t.

Saylor claims in a debate on Twitter Spaces that MicroStrategy may benefit from tax breaks by selling part of the company’s Bitcoin because the company is a business.

“Bitcoin is traded as a property right now, so that means that you can sell the property, take the capital loss, and you have the option to buy property in the future or to have bought it in the past, and that’s a different tax basis.

We have some capital gains that we pay taxes on, and then we can have some capital losses in Bitcoin, so by selling the Bitcoin and taking the capital loss, we can use that to offset some capital gains. So it’s very tax efficient for the corporation.”

MicroStrategy stated in a December 28 Securities and Exchange Commission (SEC) filing that on December 22, it sold $11.8 million worth of Bitcoin at an average cost of around $16,776 per BTC. According to the business, the transaction of about 704 BTC was made for tax considerations.

“MicroStrategy plans to carry back the capital losses resulting from this transaction against previous capital gains, to the extent such carrybacks are available under the federal income tax laws currently in effect, which may generate a tax benefit.”

The world’s most prominent corporate owner of Bitcoin continues to be optimistic about the leading cryptocurrency. According to the SEC filing, MicroStrategy purchased more bitcoin than it did sell two days following the sale.

“On December 24, 2022, MicroStrategy acquired approximately 810 Bitcoins for approximately $13.6 million in cash, at an average price of approximately $16,845 per Bitcoin, including fees and expenses.”