MicroStrategy sells its Bitcoins: The big nonsense finally explained

Michael Saylor, BTC seller? MicroStrategy is known for its massive purchases of bitcoins and much less for selling them. Then why did Michael Saylor decide to do it at the end of December part with a (small) portion his golden jackpot? The bottom of the case.

Selling BTC: No Forced Split, But…

Do you sell your bitcoins? The very idea seems repulsive Michael Sailera true converted fan of this new digital nugget, despite the drastic price drop and the Losses generated throughout 2022 from his company. Since 2020 and the first stint of Covid-19 he’s immersed himself in this promising technology, Saylor said never stopped investing time and money in bitcoins. A real Ingres violin.

The surprise was therefore great when a report from the Securities and Exchange Commission (SEC) announced that MicroStrategy had done so apart from 704 BTC at the price of $16,776, on 22.12. A first since the beginning of their monstrous accumulation. A little earlier, between Janah On November 21 and December 21, Michael Saylor’s MacroStrategy subsidiary tried to collect 2,395 BTC at an average price of $17,871 from BTC. The maneuver therefore seems to make no sense except to cause a net loss for the company; where the resale price is lower than the average purchase price of those bitcoins.

MicroStrategy and Michael Saylor, the Fake Bitcoin Vendors?

The answer ? It’s very simple. Accepting defeat was exactly the goal they were aiming for Michael Sailer. This may seem counterintuitive at first. But it’s actually a simple accounting trick that allowed him to streamline his year-end tax return. MicroStrategy hurried Redeem 810 BTC only 2 days later to recognize his loss. But then what is it really about?

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Secret revealed. There was nothing big to be done about it. It was all about lowering taxes. Wasp not crazy.

“MicroStrategy expects to offset any capital loss arising from this transaction against previously accrued gains to the extent permitted under current state income tax laws. This can result in a tax benefit. »

MicroStrategy Statement

The practice is actually very common among some investors. The latter deliberately decide to sell part of their assets at a loss in order to optimize their tax returns. In this case here for Michael Saylor, Bitcoin. Why bitcoin? It’s not insignificant.

“The rule prohibiting the sham sale of assets at a loss in order to buy them back less than 30 days later does not apply to bitcoin. Crypto is not considered a stock [aux USA], there is no special rule that applies to this. »

Selva Ozelli, Tax Attorney

So the genius Michael Saylor made good use of this exception and took advantage of the Bitcoin price to optimize his company’s taxes. He therefore never intended to withdraw Bitcoin from his war chest. True to its strategy of DCA (dollar cost average)it wouldn’t even be very surprising if he continued to buy some in 2023 for maybe, who knows, catch up with china ?

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