Bitcoin (BTC) is a deflationary currency that is basically supposed to rise in price. In the long run, this has always happened so far. The picture shows Bitcoin coins in front of a smartphone price graph.
MicroStrategy, the world’s largest publicly traded business intelligence company, announced plans to invest $ 400 million in Bitcoin proceeds from a securities issue.
MicroStrategy plans to invest another USD 400 million in Bitcoin
On December 7th , the company announced plans to invest $ 400 million in senior convertible bonds – debt that can be converted into shares of the issuing company. The announcement said:
Microstrategy intends to invest the net proceeds from the sale of the bonds in Bitcoin.
At the current Bitcoin rate, the equivalent of USD 400 million would be equivalent to 20,833 BTC. This would increase the company’s Bitcoin inventory to almost 62,000 BTC.
Microstrategy will pay semi-annual interest to the holders of the Notes through December 2025. The company also reserves the right to redeem the Notes for cash starting December 20, 2023.
The announcement states that MicroStrategy may offer up to an additional $ 60 million in bonds to its first-time buyers within 13 days of the start of the offering.
The securities are issued pursuant to Rule 144 of the Securities Act and are only available to qualified institutional investors.
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Company goes all-in BTC
In response to MicroStrategy’s announcement, Gabor Gurbacs, the CEO of New York investment firm VanEck, suggested that the offer would suggest a digital asset fund rather than a publicly traded company.
MicroStrategy caused a stir in the crypto world in August when the company revealed it had acquired Bitcoin as its primary reserve asset after purchasing 21,454 BTC for $ 250 million. The following month, it bought an additional 16,796 BTC for $ 175 million. The purchases were made through Coinbase’s OTC and broker platform.
Just a few days ago, on December 5, the CEO of MicroStrategy, Michael Saylor, announced that the company had acquired an additional 2,574 BTC at a price of around $ 19,427 each for $ 50 million, bringing the Has increased the total stock of bitcoins to around 40,824 BTC.
At current market value, MicroStrategy’s BTC inventory is worth nearly $ 784 million. The company has now generated the equivalent of 65% profit.
The demand for Bitcoin continues to rise and there is no sign that the trend should change in the near future.