MicroStrategy borrows against its Bitcoin assets to acquire more coins after amassing 124,000 Bitcoin.
On Tuesday, Chairman and CEO Michael Saylor of the business intelligence firm said that MacroStrategy, a MicroStrategy affiliate, had finalized a $215 million loan with Silvergate Bank.
MacroStrategy utilized a portion of its Bitcoin holdings as collateral in the deal, according to Saylor, renowned in the crypto industry for his unwavering belief in the top crypto asset.
According to a press release, the interest-only term loan is “backed by specific Bitcoin kept in MacroStrategy’s collateral account,” though the quantity granted isn’t specified. The $215 million loans would be used to purchase Bitcoin and cover fees, business expenditures, and other costs.
MicroStrategy is on a BTC buying spree
Silvergate, one of the significant crypto-native enterprises catering to the fast-growing institutional market for digital assets, provides Bitcoin-collateralized loans through a service dubbed SEN Leverage.
MacroStrategy obtained the financing through SEN Leverage.
“The SEN Leverage loan allows us to strengthen our position as the foremost public, corporate Bitcoin investor,” Saylor said. “We’ve basically transformed our bitcoin into productive collateral using the funds from the loan, allowing us to better execute against our business goal.”
Saylor’s group has been accumulating Bitcoin for over two years, and the loan is the culmination of that accumulation.
MicroStrategy has become the world’s largest corporate Bitcoin holder, with 124,391 coins on its balance sheet as of December 31, 2021, after making the first purchase in the commodity during pandemic-induced economic instability in August 2020.
Its debut investment was one of several factors that sparked a crypto craze in 2021, paving the way for other prominent corporations such as Tesla and Block (previously Square) to acquire Bitcoin for the first time. Bitcoin had reached a high of $69,000 before the end of the year, and El Salvador had it in its treasury.
MicroStrategy has taken many risky moves in recent months to raise money to acquire additional Bitcoin, including offering institutional investors over $1.7 billion in convertible senior notes and announcing a $1 billion common stock offering.
