MicroStrategy Plans $700 Million Bitcoin Purchase

MicroStrategy Plans $700 Million Bitcoin Purchase

EconomyBitcoin

By Jakub Lazurek

15 Jun 2024 (about 1 month ago)

2 min read

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MicroStrategy is set to invest $700 million in Bitcoin, a move that could significantly boost the cryptocurrency's price amidst current market volatility.

MicroStrategy, a leading American business intelligence company, plans to increase its Bitcoin holdings by purchasing $700 million worth of BTC. The firm has increased its original $500 million convertible notes offering to $700 million, aiming to use the proceeds to buy Bitcoin. This large purchase might boost Bitcoin's price due to increased demand amid market volatility.

In a recent announcement, MicroStrategy revealed the sale of $700 million in convertible notes, which it plans to use to buy more Bitcoin. These notes, offering a 2.25% interest rate and maturing in 2032, will be sold privately to qualified institutional investors. The firm also offers an option for these investors to buy an extra $100 million in notes within 13 days of issuance.

The proceeds from the sale, estimated at $687.8 million after expenses, will go towards acquiring Bitcoin for general corporate purposes. If investors buy the additional $100 million in notes, the total proceeds could reach $786 million.

MicroStrategy's first-quarter 2024 financial results show it holds 214,400 BTC valued at $7.54 billion, with an average purchase price of $35,180 per BTC. This makes MicroStrategy the largest Bitcoin holder among public companies, with a market capitalization of approximately $26.53 billion as of June 14, 2024.

Despite past losses, MicroStrategy remains committed to growing its Bitcoin reserves, now owning about 1% of all Bitcoin in existence. A crypto analyst known as ‘Jelle’ stated on X (formerly Twitter) that Bitcoin has been in a major re-accumulation phase for the past three months. Investors have been buying more BTC, taking advantage of the price drop in anticipation of future gains. Over the past three months, the total Bitcoin balance on exchanges has decreased by 200,000 BTC, indicating strong accumulation.

MicroStrategy's ongoing strategy to increase its Bitcoin holdings, combined with the current accumulation trend among investors, might lead to a significant price surge. As the company prepares to invest an additional $700 million into Bitcoin, the market eagerly awaits the potential impact of this substantial investment.

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