MicroStrategy sells, re-buys bitcoin in supposed tax harvesting move

Yahoo Finance crypto reporter David Hollerith outlines MicroStrategy’s tax incentives for recent bitcoin transactions, while also commenting on Solana’s ties to collapsed crypto exchange FTX.

Video Transcript

JARED BLIKRE: Bitcoin trading roughly flat today as one of its biggest supporters, Michael Saylor, is selling some of the cryptocurrency. Our David Hollerith is there– is here to break it down with us. So what’s Michael Saylor is saying about this latest move that is catching a lot of people a little bit off guard?

DAVID HOLLERITH: Yeah, Jared, so in a filing on Wednesday filed– submitted Wednesday, MicroStrategy disclosed that they, between November or December 21, they bought about $42 million worth of Bitcoin. They then sold 12 million of it a day later and then bought back roughly that amount, plus a few extra Bitcoin. And so what was going on here is it looks to be a tax loss harvesting strategy. So again, the company, the largest corporate holder of Bitcoin, did disclose that they sold Bitcoin, but then immediately bought it back. And it was to offset capital gains taxes they cited in the disclosure.

MicroStrategy also said that between a period of October and December 27, it raised an incremental $46 million after selling more than 200,018 shares in common stock at $213 per share. Now the stock is down 76% year to date and closed today at $136. MicroStrategy is still obviously a net buyer of Bitcoin. And they hold a grand total of 132,500 bitcoins.

Also, in other crypto news, the market has been trading pretty sideways for the past couple of days. That’s with the exception of Solana’s SOL token, which has sold off over 95% in– since January. And more recently, in the last day, it’s down more than 10%. And this is largely associated with the fact that FTX founder, the disgraced founder, Sam Bankman-Fried, who’s now obviously under criminal trial, set to start next week, was a heavy backer of Solana. And so that has been sort of riding in Solana’s– out of Solana’s favor. And we’ll continue to watch SOL, which has obviously had a pretty rough year, even for crypto.

SEANA SMITH: Certainly an important story to keep your eye on. David Hollerith, thanks so much.