Bitcoin Accounting Zaps Millions From MicroStrategy’s Income

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 ...