MicroStrategy Funds Fresh BTC Purchase With Bitcoin-Backed Loan

MicroStrategy, the US-based business intelligence firm has made a fresh purchase of 4,167 Bitcoins worth $190.5 million (roughly Rs. 1,435 crore), this time after acquiring a $205 million (roughly Rs. 1,545 crore) Bitcoin-backed loan from Silvergate bank. While securing the loan at the end of March through Silvergate Bank's SEN Leverage Program, MicroStrategy had made it known that a major portion of the loan would be directed towards the purchase of more Bitcoin, while the rest of it would be levelled towards improving company operations.

The acquisition was made known by the company's Chief Executive Officer Michael Saylor, who took to Twitter to share the news and said that the purchase is valued at approximately $190.5 million (roughly Rs. 1,435 crore) at an average price of approximately $45,714 (roughly Rs. 34.5 lakh) per BTC.

MicroStrategy has been making strategic acquisitions in Bitcoin since August 2020, and following the most recent acquisition, the company now has approximately BTC 129,218 acquired for about $3.97 billion (roughly Rs. 29,890 crore) at an average price of approximately $30,700 (roughly Rs. 23 lakh) per Bitcoin. Today, MicroStrategy stands as the most dogged corporate investor backing the digital currency.

Judging from the angle that MicroStrategy is primarily a business intelligence firm, the company's deep interest in Bitcoin and the entire crypto network has drawn both praise and reprisals from the broader investment world. While many have argued the misplaced investments of the company per the energy consumption requirements of BTC, the company has not in any way relented in taking advantage of opportunities that arise in the space to stack up more on Bitcoin.

The company secured a Bitcoin-collateralised loan of $205 million (roughly Rs. 1,545 crore) from Silvergate Bank through the bank's SEN leverage program to fund the most recent addition. Silvergate Bank launched its SEN Leverage Program back in 2020 which provides secure and institutional-grade loans in the US Dollar against Bitcoin collateral. Silvergate says that there's a growing demand for the product in the crypto space. As of the last year of 2021, SEN Leverage had grown to approximately $570.5 million (roughly Rs. 4,295 crore) in commitments.

The move complements the company's earlier issuances of Senior Convertible Notes to make similar purchases in the past year.