- MicroStrategy will buy more Bitcoin after a successful debt offering of $1.05 billion.
- With 71,079 BTC in its holdings, Microstrategy is one of the largest buyers of Bitcoin in the world.
- The rising prices of Bitcoin led to a 600% growth in the prices of Microstrategy’s shares.
Publicly-traded MicroStrategy completed the $1.05 billion offerings of convertible senior notes, which they will use to buy more bitcoins. There will be no interest in the debt, and the funds will allow Microstrategy to purchase more than 18000 bitcoins at current prices.
Increasing the prices of senior convertible notes from $600 million to $900 million, Microstrategy also provided an option of $130 million within 13 days. The recent debt offering by Microstrategy is essentially the straightest bet ever to rely on the price of Bitcoin, the largest cryptocurrency by market cap.
Microstrategy’s Bitcoin Bet pays Off
Today Microstrategy has come a long way and has become one of the biggest proponents of Bitcoin. With a holding of 71,079 BTC to this date, Microstrategy is one of the largest buyers of Bitcoin globally. The scale of Microstrategy’s offering makes it quite obvious that Microstrategy’s bet on Bitcoin has been very successful so far.
Microstrategy’s tryst with cryptocurrencies began last summer where they used their corporate cash to buy Bitcoin. Gauging the immense growth in Bitcoin, they began issuing debt in December last year to amplify their bet on Bitcoin past $1 billion. Their assessment was on point as soon the Bitcoin prices tripled within the next few months.
With Bitcoin’s prices rallying 350% since Microstrategy’s first purchase in August, their stake in Bitcoin has more than tripled in value today. It also had a profound impact on the share prices of MicroStrategy as it, too, has risen over 600%.
The Second Pillar of Microstrategy’s Corporate Strategy
A company with a market capitalization of over $9 billion, Microstrategy has been speculating the prices of crypto to boost its profits for some time now. Recently, they added a second pillar to its corporate strategy as they have decided to acquire and hold even more Bitcoin.
Michael Saylor, the Chief Executive Officer of Microstrategy, has been urging companies to dedicate a part of their corporate treasury to Bitcoin. He has been vocal in his support for Bitcoin, saying that holding a part of their corporate treasury in Bitcoin will protect their funds from the impact of weakening dollar and inflation.
The corporate world has been slow to react, but the number of companies adding Bitcoin to their balance sheet is increasing with time. One of the most high-profile companies to buy Bitcoin in recent times is Tesla. Sitting on a cash pile of $19 billion, Tesla plowed a small part of its cash reserves, equaling $1.5 billion into Bitcoin.
The Future
Microstrategy’s entry into the world of cryptocurrencies at a right time paid handsomely. It enabled Microstrategy to benefit greatly from the growth in the prices of Bitcoin this crypto bull run.
The impact is noticeable from the share prices of Microstrategy. Now, with a recent successful debt offering, Microstrategy will add even more Bitcoins to their holdings. With its recent successful debt offering, Microstrategy has established itself to be the flag bearer of corporate interest in Bitcoin.
If we go by expert predictions, the price of Bitcoin will rise further, which in turn, will benefit Microstrategy. The case of Microstrategy’s bet on Bitcoin proves that entering the market at a right time makes all the difference.
