MicroStrategy to Continue Bitcoin Buying Spree, With $205 Million Loan
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MicroStrategy, a subsidiary of intelligence firm MicroStrategy is set to purchase Bitcoin after taking out a huge loan from Silvergate bank
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CEO Michael Saylor disclosed that the company was issued a $205 million loan, using Bitcoin held in its account as collateral
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Since making its first $250 million BTC investment in August 2020, MicroStrategy has accumulated billions worth of the flagship crypto asset
Intelligence firm, MicroStrategy just can’t stop by Bitcoin. Since making its first investment in the world’s leading cryptocurrency in 2020, the company has gone on to accumulate billions worth of BTC.
As if that is not enough, the company is now borrowing to buy even more. CEO, Michael Saylor announced on Tuesday that Macrostrategy, a subsidiary of MicroStrategy had taken out a $205 million cash loan to buy more crypto.
The fund was secured from Silvergate bank and was collated by the tech company using its current BTC holdings as collateral. In addition to buying more BTC, the loan will also cover fees related to loan transactions and general corporate costs.
You’re probably wondering how one can use Bitcoin as collateral to buy more Bitcoin. Silvergate, a San Diego-based bank that focuses on cryptocurrencies, allows companies to take out loans using currently-owned Bitcoin as collateral.
As of the end of December 2021, MicroStrategy held 124,391 BTC. With the new loan, the company will increase its holdings to 128,687 BTC, worth more than $6 billion in today’s market.
Read also: Coinbase to Buy Mercado Bitcoin as Competition With Binance Intensifies
The tech firm also announced in June 2021 that its BTW will be held under a new subsidiary, MacroStrategy LLC, which is registered to a Virginia address.
According to CoinMarketCap, at press time, one unit of Bitcoin is valued at $47,454 as the crypto holds a market capitalization of $901 billion.
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