MicroStrategy repays US$205m crypto loan with bitcoin collateral

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27th March 2023 – (New York) MicroStrategy (MSTR), a software company co-founded by crypto advocate Michael Saylor, has prepaid the remaining principal on its $205 million loan from Silvergate Bank, a failed crypto-focused bank. The loan was paid off last Friday, with a total of $161 million paid. As part of the satisfaction of the loan, 34,619 bitcoins held as collateral were returned to MicroStrategy’s custody. The company took out the loan in March last year.

In addition, MicroStrategy has purchased another 6,455 bitcoins for roughly $150 million (about $23,238 per coin) over the past five weeks. This brings the company’s holdings up to 138,955 bitcoins, which were purchased at an average price of $29,817 each and are worth roughly $3.88 billion at the current bitcoin price of $27,900.

MicroStrategy’s latest bitcoin purchase demonstrates the company’s continued faith in the cryptocurrency. Michael Saylor, CEO of MicroStrategy, has been a vocal advocate for bitcoin and has stated that he believes it to be a better store of value than gold.

MicroStrategy also disclosed that it has raised $339.4 million this year through the sale of its shares and used the proceeds to pay back the loan from Silvergate. This marks the latest move by the company to further increase its bitcoin holdings. The company previously raised $650 million through the sale of convertible senior notes in December last year, which it used to buy more bitcoin.

The acquisition of bitcoin by MicroStrategy has drawn attention from the financial world, as many traditional investors have been wary of investing in cryptocurrency due to its volatility. However, MicroStrategy’s continued accumulation of bitcoin demonstrates that some companies are willing to take on the risk in pursuit of potential rewards.