Nasdaq-Listed Microstrategy Obtains $205 Million Bitcoin-Backed Loan to Buy More BTC – Finance Bitcoin News

Nasdaq-listed Microstrategy has obtained a $205 million bitcoin-collateralized loan from Silvergate Bank through a subsidiary to buy more bitcoin. “The interest-only term loan is secured by certain bitcoin held in Macrostrategy’s collateral account.”

Bitcoin Loan: Company Uses $205M Bitcoin Bonded Loan for Bitcoin Purchase

Microstrategy, a Nasdaq listed pro-bitcoin software firm Microstrategy, announced Tuesday that one its subsidiaries had received a bitcoin-backed loan in order to buy additional BTC.

Microstrategy CEO Michael Saylor tweets Tuesday

Macrostrategy, a subsidiary of Microstrategy, has closed a $205 million bitcoin-collateralized loan with Silvergate Bank to purchase bitcoin.

Silvergate Bank “has issued a $205 million term loan under its Silvergate Exchange Network (SEN) Leverage program to Macrostrategy LLC,” Microstrategy detailed.

“The interest-only term loan is secured by certain bitcoin held in Macrostrategy’s collateral account with a custodian mutually authorized by Silvergate and Macrostrategy,” the company noted.

Under the terms of the agreement, Macrostrategy will use the loan proceeds to purchase bitcoins, pay fees, interest, and expenses related to the loan transaction, or for its or its parent company’s general corporate purposes.

SEN Leverage was launched in 2020 and provides institutions with institutional-grade capital access through U.S. Dollar loans that are collateralized by Bitcoin.

“The SEN Leverage loan gives us an opportunity to further our position as the leading public company investor in bitcoin,” Saylor commented, elaborating:

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 already has 125,051 BTC to its treasury. “Our strategy with bitcoin has been to buy and hold, so to the extent we have excess cash flows or we find other ways to raise money, we continue to put it into bitcoin,” the company’s chief financial officer explained.

Are you a believer that more businesses should get bitcoin-backed loans in order to purchase more bitcoin? Comment below to let us know your thoughts.

Kevin Helms

Kevin, a student of Austrian Economics and a Bitcoin evangelist since 2011, was one of the first to discover Bitcoin. His main interests are in Bitcoin security, open source systems, network effects, cryptography, and intersections between economics, cryptography, and Cryptography.