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MicroStrategy to raise its Bitcoin reserve with $400M securities offering

Crypto derivatives market nailed billion amid markets crash in March

TL:DR Breakdown

  • MicroStrategy is planning to raise its Bitcoin reserve by $400 million.
  • The company intends to raise the fund through a securities offering.

The Nasdaq-listed Bitcoin (BTC) most-bullish company, Microstrategy, has revealed another plan to buy even more Bitcoin. This time, the planned investment won’t be made directly from the reserve. However, it planned to generate the capital through a new convertible bond offering. It’s worth noting that the company is already holding more than $400 million in its Bitcoin reserve, which was opened in an effort to hedge against inflation.

MicroStrategy might increase its Bitcoin reserve to $1 billion

The Virginia-based business intelligence company made this known on Monday, saying that the $400 million proceed from the planned convertible bonds will be directed to Bitcoin – meaning more buys. With such a purchase, the company will probably make history as the first corporate to hold $1 billion in its Bitcoin reserve within one year. Currently, the company sees about $785 million in Bitcoin.

The whole funds were accumulated in only three huge Bitcoin purchases. The first and second purchases were recorded between August and September. Within this period, the company bought more than 38,000 Bitcoin at an estimated price of $425 million. Again, on December 4, MicroStrategy raised the Bitcoin reserve by an additional purchase worth over $300 million, according to the company’s filing with the United States regulator. In total, the company holds 40,824 Bitcoin.

Corporate Bitcoin holding 

All the Bitcoin purchases from MicroStrategy comes as they believe that cryptocurrency is a better hedge to prevent inflation with fiat currency. The move had sparked more corporate investments in the leading cryptocurrency. For instance, Square Inc. had announced the acquisition of $50 million in Bitcoin after MicroStrategy. Other popular companies holding Bitcoin include Galaxy Digital, Voyager, Riot Blockchain, and so on. 

Ibiam Wayas

Ibiam Wayas

Ibiam is an optimistic crypto journalist. Five years from now, he sees himself establishing a unique crypto media outlet that will breach the gap between the crypto world and the general public. He loves to associate with like-minded individuals and collaborate with them on similar projects. He spends much of his time honing his writing and critical thinking skills.

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