MicroStrategy has borrowed $205 million to buy more bitcoin as CEO Michael Saylor remains committed to the cryptocurrency
- A MicroStrategy unit has taken out a $205 million loan to buy more bitcoin, extending the company's commitment to buy the cryptocurrency.
- The three-year term loan is collateralized by about $820 million worth of bitcoin.
MicroStrategy is continuing to build holdings in bitcoin, with a unit of the enterprise software company taking out a $205 million loan to buy more of the digital currency.
The subsidiary reached an agreement for a term loan with Silvergate Bank, a crypto lender run by Silvergate Capital, MicroStrategy said Tuesday. The loan marked the first time the company has borrowed to make bitcoin purchases.
The loan was collateralized with $820 million in bitcoin and it will mature in March 2025, according to a Securities and Exchange Commission filing.
"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," MicroStrategy CEO Michael Saylor said in Tuesday's statement.
MicroStrategy held 125,051 bitcoins as of January 31, with the value sitting at around $5.9 billion as of Tuesday as bitcoin traded at $47,545.
Bitcoin enthusiast Saylor in August 2020 converted virtually all of MicroStrategy's cash into bitcoin. He has repeatedly said his company will continue to add bitcoin to its stockpile and has called the digital currency likely the only known scarcity in the world.