(Bloomberg) -- MicroStrategy Inc.'s massive bet on Bitcoin is seriously enriching the company as the cryptocurrency surges. It's also battering the firm's income statement.
Its Bitcoin hoard increased in value by more than $1.3 billion during the third quarter. But accounting rules require MicroStrategy to take a writedown if the tokens it buys fall -- even only temporarily -- below the price it paid for them.
So, for the third quarter, MicroStrategy booked a $65 million writedown, leading to an unprofitable quarter. That accounting hit brings the total writedowns tied to its digital-asset strategy to $684 million for the first nine months of the year, nearly double the revenue generated by MicroStrategy's software business.
MicroStrategy's stock has surged 24% this month, zooming higher with Bitcoin and validating the company's decision to broaden its remit from just software to include investing in the hot digital asset. Its Bitcoin collection is now worth almost $7 billion at Friday's prices, up from $3.7 billion at the beginning of the third quarter.
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