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MicroStrategy Borrows $205 Million to Buy More Bitcoins

MacroStrategy LLC, a subsidiary of MicroStrategy, borrowed $205 million to buy Bitcoin.

MicroStrategy announced the news and noted that San Diego-based Silvergate Bank approved the loan through the Silvergate Exchange Network (SEN), which is best known for offering crypto-backed mortgage loans death.

Accordingly, MacroStrategy LLC has guaranteed the loan to charge interest only after using its existing BTC as collateral. The collateral BTC is currently held in a corporate collateral account with a custodian authorized by both MacroStrategy and Silvergate Capital.

In addition to buying more BTC, MacroStrategy plans to use the funds to pay for fees, interest, and costs associated with the loan transaction, while also looking to leverage the loan to pay for general company expenses or expenses. of the parent company.

Commenting on the acquisition, Silvergate CEO Alan Lane said:

“We are delighted that MicroStrategy is joining our growing list of SEN Leverage borrowers. Their innovative approach to treasury management is an exceptional example of how organizations can use their Bitcoin to support and grow a business.”

Meanwhile, MicroStrategy CEO Michael Saylor shared:

“The SEN Leveraged Loan gives us the opportunity to strengthen our position as a leading public company investor in Bitcoin. Using the funds from the loan, we have turned our Bitcoins into effective collateral, allowing for better execution of our business strategy.”

In a follow-up tweet, he maintained his bullish outlook for the top cryptocurrency, saying he would turn the world around if there was a long enough leverage and enough BTC to put it in.

This news comes after MicroStrategy announced last June that it would transfer all of the 92,079 BTC it was holding at the time, to its newly formed LLC division, which is registered in Virginia, USA.

MicroStrategy increased its BTC holdings to over 124,392 by the end of 2021. At that time, BTC was trading between $46,000 and $48,000. Soon after, the market crashed, holding BTC at $30,000.

However, the leading cryptocurrency by market capitalization has entered a new bull cycle after breaking the $40,000 level in mid-March and maintaining momentum. At the time of writing, BTC is changing hands at $47,107 after gaining 11% over the past seven days.