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in addition we believe investors should focus on two key metrics to judge our strategy success in 2021. growth in cloud subscription billings and the price of bitcoin subscription billings will be the best leading indicator of our momentum in the cloud which is our top operational priority bitcoin is our top asset allocation priority and we remain confident it represents a compelling asymmetric investment as positioned well for meaningful additional appreciation going forward the net proceeds from the sale of the notes was approximately 634.7 million dollars after deducting the initial purchaser's discounts and commissions and customary offering expenses payable by microstrategy in accordance with the company's treasury reserve policy we invested the net proceeds from the sale of the notes in bitcoin in the fourth quarter of 2020 we purchased approximately 32 220 bitcoins for seven hundred million dollars an average price of twenty one thousand seven hundred twenty six dollars per bitcoin as of december thirty first twenty twenty the company holds an aggregate of approximately seventy thousand four hundred sixty nine bitcoins which required an aggregate purchase price of approximately 1.125 billion dollars and an average purchase price of approximately 15 964. per bitcoin inclusive of fees and expenses we account for our bitcoin holdings as an indefinite lived tangible intangible assets which are subject to impairment losses if the fair value of our bitcoin holdings decreased below its carrying value during the reporting period the carrying value of our bitcoin holdings as of december 31st 2020 was 1.1 billion dollars which reflects a 70.7 million dollar cumulative impairment charge that also is reflected as a loss on our gaap income statement we incurred an impairment charge of 26.5 million dollars in q4 2020. we are required to mark our bitcoin holdings at the lowest fair market value price since since acquisition of each bitcoin we exclude the quarterly impact of bitcoin impairment charges from our non-gaap operating income and non-gaap diluted earnings per share populations going forward we'll continue to actively manage our balance sheet including potential share repurchases you should expect per treasury policy that we will purchase additional bitcoins we generate cash beyond what we need to run the business on a day-to-day basis or to deploy for other corporate purposes consistent with this policy on january 22nd 2021 we announced we purchased approximately 314 bitcoins for 10 million dollars an average price of approximately 31 808 dollars per bitcoin inclusive of fees and expenses i'll finish by saying we're encouraged by the company's performance in 2020 and we're excited about the potential for 2021. there are a lot of positive things happening at microstrategy and with that i'll turn the call over to michael to talk about our product innovation microstrategy world and our capital allocation strategy in more detail but we'll also be seeking to actively acquire additional bitcoin as part of our overall corporate strategy um in the quarter uh we did acquire uh bitcoin on three separate occasion or two separate occasions we acquired 50 million dollars worth of bitcoin at 19 427 dollars a bitcoin on which we announced around the 4th of december and around the 21st of december we announced we'd acquired uh another 650 million dollars worth of bitcoin at around 21 925 dollars a bitcoin and of course as fong pointed out on the 22nd of january uh we acquired more bitcoin 10 million dollars worth of it at 31 808 um our view of bitcoin is it's uh is uh it is uh the technically superior digital asset in the world it is it is a superior asset for storing value over the long term uh that means we expect capital to flow into this asset from other weaker assets or other assets that don't have the favorable technical characteristics of bitcoin uh in addition uh to bitcoin being um a great digital asset and a great store of value uh bitcoin is also uh an open protocol for moving monetary energy it is in essence the first digital monetary network having having an engineered safe haven asset and also having it run on a digital monitoring network makes it an extraordinarily unique opportunity for our company we intend uh to continue in our role as an innovator and as a market uh thought leader in the space one thing we've done is prepared a uh a bitcoin corporate playbook and uh we have gathered all of our uh all of our uh documents related to governance uh to uh to accounting uh to security uh to technical protocols uh to finance that we believe would be interesting to other corporations that wish to integrate bitcoin into their corporate strategy and we're going to open source these documents and make them freely available to the world we think it's it's good for the industry we think it's good for us and uh and if you um if you sign up for our bitcoin for corporations uh summit next week you'll be able to get early access to these documents um we we will go beyond this to make other bitcoin education materials available to anyone in the world that's interested in them we have uh we have done that up to now by placing many of these education materials on our hope.com domain so if you ever want to know more about bitcoin just remember bitcoin is hope and type h-o-p-e and you will go to our hope domain and you will see not only the ability to sign up for this conference but also all of the other bitcoin materials we have gathered and curated um i am i uh continue uh to advocate the bitcoin standard and evangelize bitcoin as a solution uh to many problems that corporations and individual investors around the world face um we've had good success in our outreach on youtube i've i've got videos some videos that have run four hundred thousand times certainly two million hours or more of probably two to four million hours of streaming video on youtube that we've contributed um we believe this is good for bitcoin we believe it's good for microstrategy's brand we believe uh that is going to help us uh to grow our enterprise software business as well as to pursue our bitcoin strategy and so far we've seen lots of positive uh benefits from our educational initiatives very very good feedback from our employees we're finding that we're able to attract and recruit employees more easily we found it's good for employee retention and morale we found it's also very good for our our sales and marketing and outreach to corporations all over the world when you're an enterprise software company one of the most important things to do is always establish relationships with senior c-suite executives and if they know your company and if they've heard your company and there are positive uh positive uh vibes in the marketplace around your brand that makes it easier for all of our executives and sales teams uh to meet with and engage with the customer so we feel really good about about the synergy between our software strategy and our bitcoin strategy and we'll continue with that with regard to bitcoin for corporations next week on the third and the fourth of february we will host i expect it'll be about 2 000 or more executives and officers directors and advisors of corporations who are interested in figuring out how they might integrate bitcoin into their corporate strategy and uh it's a it's a hot topic because as the bitcoin uh monetary network grows you see lots of examples of successes like grayscale grayscale grew their assets by a factor of 10 in 12 months you see successes like square and paypal both of which have had extraordinary success by plugging their mobile apps into bitcoin you see other companies like genesis and naidig who have had extraordinary success uh acting as prime brokers for bitcoin you see companies like fidelity uh they're having success offering offering fund and brokerage and custodial services for bitcoin uh the industry is really growing rapidly um all the companies in the industry that have that have managed to integrate bitcoin into their strategy either on their balance sheet as a treasury reserve asset or in their p l are are seeing extraordinary enthusiastic response from you know market share gains and they're creating shareholder value we're going to be sharing everything that we know about how to go about doing this and in addition to laying out uh our methodology and sharing our experiences we've also brought together 10 of the enterprise grade bitcoin vendors in the space and either i or fong will be interviewing the ceos or the heads of institutional services and sales for each of these top 10 vendors in the space so that if you wanted to come up to speed in a matter of 10 hours and and jump start a process that would take you two or three months then you can do it in two days next week and of course when we finish uh with our sessions next week we will um go ahead and upload those on demand to make those resources available to the industry going forward for the coming year so to summarize we're really enthusiastic about our enterprise software strategy hyper intelligence our multi-tenant cloud and our embedded uh intelligence and sdk capabilities give us a differentiated offering in the market we're best in class there and i expect we'll continue to grow that business we're very enthusiastic about our bitcoin strategy we have a chance to be a leader in this marketplace and and we're going to do our best to execute on that strategy and help other companies uh follow us in what we have done and um with that i want to thank everybody for your support and shareholders well bitcoin's an important part of our overall strategy so going forward we will continue to plan to hold our bitcoin we will invest additional excess cash flows in bitcoin and we'll explore various approaches to acquire additional bitcoin as part of our general corporate strategy we're global leader in enterprise analytics software and services uh we continue to operate the software business you know as we have over the last 30 years i mean but at the same time bitcoin's an important part of our strategy we have a bitcoin strategy in addition to a software strategy so so if you just keep in mind that we've got two strategies we're going to pursue them both very enthusiastically then i think that's the best way to think about the company we're going to grow our enterprise software business and we're going to acquire additional bitcoin on the balance sheet all right um this one it's another bitcoin question does your bitcoin strategy depend on selling high and buying back more bitcoin at lower prices no no it doesn't um our belief is that uh that bitcoin is is the first effective digital monetary network and it's going to grow over time uh we're early adopters the early bitcoin holders are adopters it's the solution to every company's problem and every individual investors problem and so as more and more corporations adopt the bitcoin standard and they use it as a store of value as more investors and mutual funds and hedge funds use it as a store of value as more individuals use it as a store of value the overall amount of monetary energy the total total amount of capital flowing into the network is just going to increase in time and because there's a fixed amount of bitcoin that just means the price is going to go up and as i've said to many people you know if you the the nature in the free market is in a free market capital flows from the weakest assets to the strongest assets if you were in an economy that had a collapsing currency like venezuela and you had dollars and you had venezuelan boulevard well the dollar is going to go up in value versus the bolivar continuously and forever as long as one currency is weakening the other is strengthening and i think i think free capital markets are continuously adjusting as capital flows to the place where you get the highest return i think because bitcoin is the technically superior asset it's thermodynamically sound money i think that more and more monetary energy or capital will flow into it i think the price will continue and uh certainly there's there's no reason why it shouldn't replace gold as a non-sovereign store of wealth and gold is a 10 trillion dollar asset class so we don't try to time the market uh we don't think there's any particular point at which you would ever trade out of the market um bitcoin is is uh a better safe haven asset than gold if in the future god comes down and invents something better than bitcoin and more more money and more people adopted that and that becomes bigger and stronger and better and we see that well we'll share that with our shareholders and we may incorporate that into our treasury reserve strategy but right now bitcoin seems to be dynamically strongest asset and technically superior assets so we just intend to progressively acquire more bitcoin and we'll probably do it at prices that are going up i think when we we acquired bitcoin at eleven thousand eight hundred then we did it at ten thousand when it dipped down then we did it at nineteen thousand then we did it twenty one thousand then we did at 31 000 we're not really attempting to time the market we're strategic buyers and we're looking out a decade or longer which we think is the right way to think about this all right thank you michael i'm going to give a question to fong here i think michael's been working too hard um from the time a cfo or a ceo of a publicly traded company mentally commits to buying bitcoin for their company to the time it confirms on the blockchain and is on their balance sheet what's the average time frame for the whole process yeah that's a good question and something actually will be addressing in our bitcoin for corporations uh summit next week um there's really no sort of straight answer or that or one size fits all answer it depends on you know how a publicly traded company might decide to invest in bitcoin uh if they decide to invest in a fund it could be quite a bit faster you know there are corporate governance issues and treasury issues that need to be worked through uh if they decide to invest directly into bitcoin uh on the exchange and through a custody solution it could take longer as they identify the right platform the right custodian or custodians and the associated controls to it so uh it literally can be done in a matter of weeks if somebody wanted to invest you know via fund and it could take months as long as six or nine months depending on the corporate governance structure and how how detailed uh the corporation wants to be thank you fun question is is microstrategy using a self-custody cold storage solution for the company bitcoin holdings or are services of a third-party custodian being utilized we can't comment on that for security reasons unfortunately but thanks for asking all right we've got another um cryptocurrency question are you are you interested in acquiring other cryptocurrencies or diversifying beyond bitcoin uh is this for me or for phong let you take that one like this is for you mike yeah our view is the bitcoin is an institutional grade treasurer reserve asset it's it's 95 dominant as a proof-of-work crypto asset network uh that makes it uh the crypto asset winner you know if the use cases is money or long-term store of value i.e digital gold so what we wanted with our treasury was in essence digital gold from the dominant monetary network in the world the one that was most secure the one that was uh most adopted by other institutional grade investors and uh that would be bitcoin i think the other cryptos are our investment theses they're very they're more like venture capital investments and they have a different risk reward profile and so we don't have a portion of our treasury allocated to venture capital so it wouldn't be appropriate for us you live tangible intangible asset with annual impairment tests will there not be a lot of volatility in the financials year over year yeah it's it's a it's a good accounting question um but it's it's sort of you know the the i'll call it book value of our bitcoin versus what may be perceived as the market value for bitcoin uh how we get to based on the accounting of bitcoin uh as an intangible asset is every single quarter we take each and every one of our wallets of bitcoin and we look at uh the prevailing low price on our current exchange that we look at when we write down uh or impair each of those wallets at that price and that's what's led to uh i'll call it sort of gap changes in our balance sheet that you saw in q3 and q4 and there is a it creates a perceived disconnect between the book value and what one might interpret as the market value of bitcoin um what we've done is we provided non-gaap financials that back out that impact in our financial statements uh and in our earnings report and as a result i i think uh there's transparency into both means the book value and a potential market value that someone can understand better uh and i think the market understands that very well it's very mature so we don't really need to do any other i'll call it hedging of the volatility of our bitcoin assets as a result if i could piggyback uh jeremy uh we don't hedge the bitcoin i don't think it would be a good idea to hedge the bitcoin i think that the volatility comes hand in hand with the appreciation and the value of the bitcoin so it's a mistake to to pursue any particular hedging strategy we would be losing the alpha or or the the theoretical return on the bitcoin over time our our financing uh time frame is five years we have five year convertible note so we certainly don't look at the volatility over the course of a day a week a month or even a year oh and and over five years we had we don't really have any financing against the bitcoin itself marked to the value of the bitcoin the financing is is just against the business in general so i would characterize us as being very patient long-term uh holders of bitcoin not not overly concerned with near-term or even midterm volatility for that matter you