MicroStrategy takes on $205m loan to buy more Bitcoin

Michael Saylor, the company’s CEO, argues that bitcoin leverage could help him move the world

MicroStrategy, the software company that spearheaded the rise of corporations adding bitcoin to their books, has further boosted its holding of the world’s largest cryptocurrency. 

Subsidiary takes on loan to buy bitcoin

According to a regulatory filing, MacroStrategy, a subsidiary of the firm, obtained a $204.7m (£155.6m) loan, net of closing fees and expenses, from cryptocurrency payments provider Silvergate Bank. The money will go towards the acquisition of more bitcoin, the payment of loan expenses and general corporate purposes. 

The loan was granted via the Silvergate Exchange Network (SEN) Leverage programme, which issues US dollar loans using bitcoin as collateral. It was collateralised with around $820m worth of bitcoin, which represents 12% of MicroStrategy’s total bitcoin holding. 

MicroStrategy now holds approximately 125,051 bitcoins, purchased for around $3.8bn, or for an average price of $30,200 per bitcoin. These substantial purchases were enabled in part by the company’s decision to take on around $2.2bn in debt. 

With bitcoin worth $47,237.30 at the time of writing, MicroStrategy’s total holding is now worth around $5.9bn. 

Advocate for bitcoin ownership

MicroStrategy founder and CEO Michael Saylor has been among the vocal advocates for bitcoin ownership, both for individuals and corporations. 

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He stated: “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.”

Saylor’s full-throated belief in bitcoin and willingness to take on substantial levels of debt to purchase the crypto has prompted some anxiety within the financial world. Last year, UK bank HSBC banned customers of its online share-trading platform from purchasing MicroStrategy stock. 

At $517.60, the company’s stock price stands 42% below the all-time high it reached in November 2021. 

Unrepentant, Saylor tweeted on Tuesday: “Give me a lever long enough and #bitcoin on which to place it, and I shall move the world.”

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