MicroStrategy to Purchase $650 Million in Bitcoin

MicroStrategy to Purchase $650 Million in Bitcoin

  • MicroStrategy’s recently announced bond sale has already been completed.
  • The company has raised $650 million to purchase more BTCs.
  • MicroStrategy’s faith in Bitcoin is changing investor sentiment towards digital assets.
  • The Trust Project is an international consortium of media organisations based on transparency standards.

MicroStrategy has already completed the sale of $650 million in convertible bonds. The company will use the proceeds from this sale of Bitcoin Trader to purchase additional Bitcoins.

MicroStrategy is already one of the largest companies to own digital currency. However, the more than 40,000 BTCs it currently holds are clearly not enough for CEO Michael Saylor.

MicroStrategy’s bond sale raises $150 million more than expected

MicroStrategy and its CEO Michael Saylor have quickly become one of the leading topics of discussion in the cryptography industry. The company attracted attention when it announced in August of this year that it had used a portion of its cash reserve to purchase Bitcoins.

MicroStrategy subsequently purchased additional BTCs, bringing its total holdings to more than 40,000 BTCs. In October, Saylor also announced personal investments of more than 17,000 Bitcoins.

However, this BTC investment of approximately $730 million was clearly not enough for the company. As reported by BeInCrypto, the company revealed on December 8 that it intended to raise $400 million to purchase more BTC.

On Friday, MicroStrategy announced the completion of the sale of its convertible bonds. According to a press release issued by the company, the sale generated an additional $150 million, bringing the total raised to $650 million.

The 0.75% senior convertible bonds were sold to institutional buyers. The identity of these buyers remains unknown.

The bonds are scheduled to mature on December 15, 2025. MicroStrategy will retain the option to redeem them for cash, MicroStrategy common shares, or a combination of both.

Is MicroStrategy too focused on Bitcoin?

When Saylor first announced MicroStrategy’s bold bet on Bitcoin, its share price skyrocketed. This prompted some to say that investing in MicroStrategy represents a way for investors unable to buy BTCs to gain exposure to the asset price.

However, the recent sale of bonds has caused some observers to change their minds. On December 8, Citibank analysts downgraded the company’s stock rating from „neutral“ to „sell“.

The bank said Saylor now appears to be too focused on the crypto industry. Some fear that this could hurt his business. However, Saylor’s gamble has paid off so far. Indeed, the vast majority of his company and personal assets have been purchased at much lower prices.

Large-scale help to change sentiment towards the BTC

MicroStrategy is just one of many players starting to take Bitcoin seriously this year. Legendary investors such as Paul Tudor Jones, major financial institutions such as JP Morgan, and other publicly traded companies have all expressed optimism about the future of Bitcoin or have invested in it in recent months.

The most recent company to take a significant position in digital currency is Massachusetts Mutual. This 170-year-old life insurance company is reported to have purchased $100 million from BTC. It also reportedly invested $5 million in the financial services company NYDIG, which specialises in crypto-currency.