Michael Saylor is one of the most vocal bitcoin evangelists.
In addition to the interviews in which he praises the merits of the most popular cryptocurrency, he devotes a large part of his tweets to trying to convince others of the major assets of bitcoin.
MicroStrategy (MSTR) – Get MicroStrategy Incorporated Class A Report, his company, is one of the few established companies that has invested in digital currencies and in this case bitcoin.
To date, MicroStrategy holds 125,051 bitcoins worth $5.93 billion at the time of writing, according to Bitcoin Treasuries.
Tesla (TSLA) – Get Tesla Inc Report, the electric vehicle maker run by Elon Musk, Block (SQ) – Get Block Inc Class A Report, formerly Square, the fintech founded by fellow bitcoin evangelist Jack Dorsey, are also the other big names holding bitcoin in their balance sheets.
Tesla owns 43,200 bitcoin valued at $2.05 billion at last check, while Block holds 8,027 bitcoin worth $380 million.
After seeing the value of their investment in bitcoin decrease at the start of the year due to the fall in crypto prices, these companies must have been smiling for a few days since bitcoin has resumed its march forward. The price of the top crypto in terms of market value could cross $50,000 in the coming days, according to experts. Bitcoin is currently trading at $47,351.57, according to CoinGecko.
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Huge Loan to Invest in Bitcoin
The resurgence of the crypto market seems to give them wings. MacroStrategy, a subsidiary of MicroStrategy, has just obtained a $205 million term loan collateralized by bitcoin from Silvergate Bank, a subsidiary of Silvergate Capital Corporation (SI) – Get Silvergate Capital Corp. Class A Report , the leading provider of innovative financial infrastructure solutions and services for the growing digital currency industry.
The loan was collateralized at closing by bitcoin with a value of approximately $820 million placed in a collateral account with a custodian mutually authorized by the lender and the borrower, according to a SEC filing from MicroStrategy.
“Under the terms of the agreement, MacroStrategy will use the loan proceeds to purchase bitcoins, to pay fees, interest, and expenses related to the loan transaction, or for MacroStrategy’s or MicroStrategy’s general corporate purposes,” the two companies said in a press release.
This “loan gives us an opportunity to further our position as the leading public company investor in bitcoin,” said Saylor, chairman and chief executive officer of MicroStrategy. “Using the capital from the loan, we’ve effectively turned our bitcoin into productive collateral, which allows us to further execute against our business strategy.”
New investments in bitcoin could indeed pay off for MicroStrategy.
Bitcoin seems to be on a good dynamic, which could allow it to reach the record level of $69,000 crossed on November 10th. Some uncertainties have been removed, particularly in terms of regulation, even if the hardest part remains to be done in this regard in the United States.
But the Russian invasion of Ukraine has shown other uses of crypto, helping to drive its adoption. And large investors, such as once-wary hedge funds, seem to be getting a bit more crypto-friendly.
Finally, the reduction in fears of a global recession also encourages investors to buy so-called risk assets to which bitcoin belongs due to its high volatility.