MicroStrategy has announced plans to raise $600 million in order to maintain its Bitcoin buying binge.
The business intelligence services provider already owns 70,784 BTC, which is worth $3.7 billion at the current exchange rate. The firm started buying Bitcoin last year and it has paid an average of $16,035 per coin, which is well below the current price of around $52,500.
Chief executive and majority shareholder Michael Saylor has become a billionaire thanks to his approach, and he has since convinced others to follow suit. Now MicroStrategy has revealed plans to sell $600 million in convertible senior notes to qualified institutional buyers in order to buy more Bitcoin with the proceeds.
The notes will mature on February 15, 2027, and MicroStrategy can redeem cash for all the notes sold from February 20, 2024.
Saylor Leads the Charge for Bitcoin Adoption
Saylor started buying Bitcoin in August 2020, when it acquired 21,454 bitcoins using existing cash on its balance sheet. Saylor described it as a hedge against a devalued dollar at a time of rampant quantitative easing.
The company’s valuation has skyrocketed since then, going from less than $2 billion in August to around $10 billion after announcing this week’s news. Many investors treat it as a de-facto Bitcoin ETF, which has led to a buying frenzy and pushed up the price.
Earlier this month, Saylor welcomed thousands of leading executives from across the globe to a virtual Bitcoin-themed conference called WORLD.NOW. He used the platform to reveal his firm’s playbook for buying Bitcoin, and he encouraged other companies to follow in its footsteps in order to avoid financial “serfdom”.
“There’s a macroeconomic wind blowing – big – it’s going to impact $400 trillion of capital,” said Saylor. That capital is sitting in fiat instruments that are being debased. That capital is going to want to convert into strong money.”
Bitcoin Gathers Momentum with ETF Launch
Saylor inspired Tesla owner Elon Musk to invest in Bitcoin. The electric car producer invested $1.5 billion in Bitcoin following the conference, and that holding has since increased by more than $700 million as Bitcoin’s valuation has continued to rise.
Twitter founder Jack Dorsey has also backed Bitcoin, as his company, Square, bought 4,709 BTC at an aggregate price of $50 million in October 2020. PayPal and BNY Mellon have made significant moves to support cryptocurrencies, and there is now speculation regarding whether other major companies will convert some of their cash balances into Bitcoin.
MicroStrategy is keen to maintain the momentum, and it plans to spend the entire $600 million on buying up more Bitcoin.
The first North American Bitcoin ETF made its debut yesterday, with investors exchanging $165 million worth of shares. Issuer Purpose Investments Inc. said that the ETF invests directly in physical/digital Bitcoin. The ETF has the ticket BTCC.