MicroStrategy gets $205 million loan to buy more bitcoin

abdelaziz Fathi

MacroStrategy, a wholly-owned subsidiary of MicroStrategy Inc, raised $205 million via an interest-only term loan due 2025. Offered by the crypto-friendly bank Silvergate Capital, the Michael Saylor-led enterprise software company intends to use the net proceeds from the loan to acquire additional bitcoins.

MicroStrategy

Per an SEC filing, the loan was “secured by certain Bitcoin held in MacroStrategy’s collateral account.” Specifically, the fiat money was granted against a bitcoin holding worth around $820 million, which represents 12% of MicroStrategy’s total crypto holding.

“The loan matures on March 23, 2025, and bears interest at a floating rate equal to the Secured Overnight Financing Rate 30 Day Average as published by the Federal Reserve Bank of New York’s website (0.099% as of the Closing Date) plus 3.70%, with a floor of 3.75% […] The loan may be prepaid at any time, subject to prepayment premiums of 0.50% and 0.25% of the loan amount prepaid for prepayments during years one and two of the loan term, respectively,” the statement further reads.

The loan was collateralised through Silvergate

The transaction was conducted through the Silvergate Exchange Network (SEN) Leverage program. The product, which was first launched in 2020, also allows the bank’s customers to obtain US dollar loans collateralized by their bitcoin holdings at some crypto exchanges that Silvergate is currently serving. Dubbed ‘SEN Leverage,’ the service is a near real-time payments platform that enables users to send US dollars 24 hours a day, 7 days a week, 365 days a year.

Silvergate already counts major crypto exchanges ranging from Kraken to Coinbase as clients. However, the California-based bank abruptly cut ties with Binance last year, but the developments didn’t impact its American affiliate exchange.

Recent data shows that MicroStrategy had added 660 bitcoins to its strategic reserves between December 30, 2021, and January 31. With its most recent purchase, the Virginia-based business intelligence firm holds an aggregate of 125,051 bitcoins, which were acquired at a total cost of around $3.78 billion and an average purchase price of approximately $30,200 apiece. The worth of the company’s total bitcoin holding comes to around $5.9 billion at current prices.

The analytics software maker, run by bitcoin bull Michael Saylor, has taken advantage of any price drop in Bitcoin to continue beefing up its investment in the world’s most-traded cryptocurrency.

Read this next

Retail FX

ThinkMarkets expands CFDs lineup to over 4000 ETFs and shares

ThinkMarkets has expanded its service offering by incorporating 2500 new CFDs on shares and ETFs on its ThinkTrader platform.

Retail FX

France regulator warns investors of Omega Pro, Businessempire.fr

France’s financial markets regulator alerted investors that scams related to Omega Pro Ltd are beginning to circulate, with the blacklisted firm capitalizing on the situation to run a range of “unrealistic” offers.

Digital Assets

Web3 platform Grand Time paid $2 million in token earnings to date

Community-driven Web3 platform Grand Time said its offering – which includes a multifaceted platforms and its native token – has been gaining significant traction highlighted by impressive operational metrics.

Institutional FX

FX volumes at MOEX halved in April as ruble gains gorund

Currency trading at Moscow Exchange (MOEX) halted its upward route in April as monthly volumes nearly halved from a month earlier.

Digital Assets

FTX US adds stock trading, fractional shares to crypto platform

FTX US, the American subsidiary of crypto exchange FTX has kicked off stock trading feature to its customers in an effort to compete with popular platforms such as Robinhood and eToro.

Industry News

UK FCA empowered to remove brokers’ permissions in 28 days

Businesses with permissions they don’t need or use, risk misleading consumers. These new powers will enable us to take quicker action to cancel permissions that are not used or needed.

Industry News

CFTC charges $44m Ponzi scheme but millions may have fled to foreign crypto exchange

The CFTC alleged that defendants transferred millions of dollars to an off-shore entity that, in turn, may have transferred funds to a foreign cryptocurrency exchange. None of these funds were returned to the pool.

Technology

Saxo Bank deploys Adenza to address Basel and EBA requirements

The integration of ControllerView will enhance Basel-driven capital calculations and reporting at Saxo Bank in support of the bank’s multijurisdictional capital and liquidity reporting requirements throughout Denmark, Switzerland and UK, with plans to expand into the Netherlands.

Executive Moves

ComplySci appoints CTO, CPO, and CLO to further regtech’s product expansion

ComplySci offers compliance software used by more than 1400 global institutions to identify risk and address regulatory compliance challenges.

<