This article comes fromDecrypt, original author: Jason Nelson

Odaily Translator | Nian Yin Si Tang

This article comes from

, original author: Jason Nelson

According to MicroStrategy's second-quarter 2022 earnings report released on Tuesday, the company booked a non-cash digital impairment charge of $917.8 million during the quarter.

An impairment charge is a substantial reduction or loss in the recoverable value of an asset. With respect to Bitcoin held by MicroStrategy, the impairment charge reflects the decline in the price of Bitcoin compared to the price at the time of purchase by MicroStrategy.

Impairment may occur due to changes in policy or economic environment, such as the current crypto bear market.

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MicroStrategy's non-GAAP expenses for the second quarter of 2022.

MicroStrategy Q2's $917.8 million digital asset impairment charge was a significant increase from the $170.1 million in Q1 2022.

Since August 2020, MicroStrategy has purchased 129,699 bitcoins at an average price of $30,664 each. When Bitcoin hits an all-time high of $68,000 per coin in November 2021, the company's total holdings will be worth about $8 billion. At the current price of $23,000 per bitcoin, the total value of these bitcoins is about $2.9 billion.

The company has since purchased 421 bitcoins for $20,000.

Chief Financial Officer Andrew Kang said that MicroStrategy's parent company holds 14,000 bitcoins, while the remaining 115 are held by subsidiary MacroStrategy. Among them, 85,000 bitcoins are not used as collateral.

"We have enough collateral to cover any price fluctuations," he said.

Kang added: “The digital asset impairment charge is always greater than the non-GAAP operating loss every quarter.” This means that Bitcoin’s price volatility is a major factor in the company’s balance sheet losses.

"We anticipated volatility in bitcoin," Michael Saylor added.

"Volatility means bitcoin is more interesting, so microstrategy is more interesting," he explained. "Volatility is vitality."

MicroStrategy also announced today the appointment of company president Phong Le as CEO, succeeding Michael Saylor, who will continue as executive chairman. Saylor has served as MicroStrategy's CEO and Chairman of the Board since founding the company in 1989. Phong Le has served as President since July 2020 and has held various other senior management positions since joining MicroStrategy in 2015, including Chief Financial Officer and Chief Operating Officer.

Michael Saylor stated, “I believe that separating the roles of Chairman of the Board and CEO will allow us to better execute our two strategies of buying and holding Bitcoin and growing our enterprise analytics software business.” As Executive Chairman , I will be able to focus more on our bitcoin buying strategy and related bitcoin advocacy programs, while Phong will be empowered as CEO to manage overall company operations.”