It seems that MicroStrategy’s bitcoin buying spree hasn’t peaked yet. Michael Saylor’s company could actually acquire up to $1.5 billion in additional BTC through the 2 large financial transactions it has launched or is preparing to complete.
100,000 BTC while waiting for 1 BTC at $100,000
MicroStrategy is preparing to launch an “at-the-market” securities offering, allowing it to sell up to $1 billion of its Class A common stock multiple times over a period of time, according to an S-3 filing on June 14, 2021, with the US SEC.
The company has partnered with investment bank Jefferies Group, which will assist in the offering. The net proceeds from the offering will be used “for the company’s overall corporate purposes, including the acquisition of bitcoins.” However, the company has not yet determined how much of the net proceeds “will be used specifically for a particular purpose.”
MicroStrategy held 92,079 BTC as of June 4, purchased at an average price of $24,450 per BTC. In addition, the company had announced on June 14 the sale of $500 million in senior secured bills maturing in 2028 to “acquire additional bitcoins.”
An exceptional hedge for an unprecedented crisis
In its document, MicroStrategy further states the reasons why the company decided to include Bitcoins on its balance sheet. The company cites the economic crisis due to Covid-19, government stimulus packages and falling interest rates.
It also refers to the crisis of confidence “in and between institutions and political parties and the world at large”. Against this backdrop, MicroStrategy says Bitcoin represents “a more attractive store of value than fiat currency.” The company also believes that future appreciation in the value of Bitcoin will be possible if the above factors lead to “broader adoption of Bitcoin as an alternative store of value.”
Bitcoin adoption is expected to see a sharp increase with El Salvador’s decision to make the doyenne of cryptos legal tender. Other countries with relatively weak local currency, such as the Kingdom of Tonga, may also follow El Salvador’s lead.
