Bitcoin's 72% rally to start 2023 helps push Michael Saylor's MicroStrategy to its first profitable quarter in over 2 years

• Michael Saylor's MicroStrategy posted its first profit in nine quarters to start 2023.
• The largest holder of bitcoin added 7,500 tokens in the quarter as it rallied over 70%.

Michael Saylor's MicroStrategy notched its first profit in nine quarters as bitcoin rallied over 70% in the first three months of 2023.

Saylor took to Twitter to point out how his company — the largest holder of bitcoin — has outperformed its peers and tech companies since taking on its crypto investments.

MicroStrategy added 7,500 bitcoin tokens in the first quarter, bringing its total to 140,000 tokens. The enterprise software company has been stockpiling crypto — which is up roughly 73% year-to-date — since August 2020, and the average purchase price for its stash is $29,803.

At bitcoin's current price of $28,528, that values the company's holdings at about $3.9 billion.

As crypto slumped, those holdings previously resulted in impairment charges, which weighed on profits. But with the token's rally this year, MicroStrategy reported an impairment loss of $18.9 million for the quarter, down from the prior quarter's $197.6 million impairment.

And after tapping a tax benefit of $453.4 million, MicroStrategy posted net income of $461 million in the first quarter, reversing from a net loss of $249.7 million in the fourth quarter.

"The conviction in our bitcoin strategy remains strong as the digital asset environment continues to mature," chief financial officer Andrew Kang said in a statement.

Plus, per an SEC filing, those gains allowed MicroStrategy to repay its $205 million bitcoin-backed loan with Silvergate Bank in March, a bank that had shuttered that month. The total MicroStrategy paid was $161 million.

"MicroStrategy repaid its $205M Silvergate loan at a 22% discount," Saylor tweeted at the time.