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

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.”

Company to Use $205M Bitcoin-Backed Loan to Purchase Bitcoin

The Nasdaq-listed pro-bitcoin software company Microstrategy announced Tuesday that one of its subsidiaries has obtained a bitcoin-backed loan to purchase additional BTC.

Microstrategy CEO Michael Saylor tweeted 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, launched in 2020, provides institutional-grade access to capital through U.S. dollar loans 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 has already acquired 125,051 BTC for 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.

Do you think more companies should obtain bitcoin-backed loans to buy more bitcoin? Let us know in the comments section below.

Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.