MacroStrategy secures a $205M loan to purchase more BTC MacroStrategy secures a $205M loan to purchase more BTC
Apart from buying BTC, MicroStrategy seeks to use the money to pay the fees, interest, and expenses related to the loan.
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Updated: Mar. 29, 2022 at 7:28 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
MacroStrategy LLC, a subsidiary of business intelligence company MicroStrategy, has taken out a $205 million loan to buy Bitcoin (BTC). MicroStrategy announced this news earlier today, noting that San Diego-based Silvergate Bank serviced this loan through the Silvergate Exchange Network (SEN), which is famous for offering collateralized loans on crypto.
According to the announcement, MacroStrategy LLC secured the interest-only loan after using its existing BTC holdings as collateral. The collateralized BTC is currently held in the company’s collateral account with a custodian that both MacroStrategy and Silvergate Capital authorized.
Apart from purchasing more BTC, MacroStrategy plans to use the funds to pay fees, interest, and expenses related to the loan transaction. The firm also seeks to use the money to settle its general corporate costs or those of its parent company.
Commenting on this deal, Silvergate’s CEO, Alan Lane, said,
“We’re thrilled to add MicroStrategy to our growing list of SEN Leverage borrowers. Their innovative approach to treasury management is an exceptional example of how institutions can utilize their bitcoin to support and grow their business.”
Michael Saylor maintains a bullish outlook on BTC
Michael Saylor, MicroStrategy’s CEO, said:
“The SEN Leverage loan gives us an opportunity to further our position as the leading public company investor in bitcoin. Using the capital from the loan, we’ve effectively turned our bitcoin into productive collateral, which allows us to further execute against our business strategy.”
In a subsequent tweet, he maintained his bullish outlook on the flagship cryptocurrency, saying he would move the world if he had a long enough lever and BTC to place it on.
This news comes after MicroStrategy announced MacroStrategy in June last year, saying it would transfer its BTC holdings, 92,079 BTC at the time, to the newly formed LLC division, which is registered in Virginia, US.
MicroStrategy proceeded to increase its BTC holdings to over 124,392 coins by the end of 2021. At the time, BTC was trading between $46,000-$48,000. Soon afterward, the market crashed, trapping BTC in the $30,000 level for the better part of this year.
The leading crypto by market capitalization, however, entered a new bull cycle after breaching the $40,000 level in mid-March and maintaining its gains. At the time of writing, BTC is changing hands at $48,508.83 after gaining 0.05% in the day and 11.40% over the past seven days.
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Jinia Shawdagor
Jinia is a fintech writer based in Stockholm, Sweden. With years of experience, she has written about cryptocurrency and blockchain for renowned publications such as Cointelegraph, CoinMarketCap, Bitcoinist, Invezz, etc.
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MicroStrategy
MicroStrategy (Nasdaq: MSTR) is a worldwide leader in enterprise analytics and mobility software.
Michael Saylor is the Executive Chairman, founder, and principal shareholder of MicroStrategy.