MicroStrategy CEO Says the Software Firm Is Considering Equity or Debt Financing to Purchase More Bitcoins
Nicholas Otieno Feb 26, 2021 01:56
MicroStrategy CEO Michael Saylor has said that he is considering issuing more debt to enable the company to buy more Bitcoins. He stated that it makes sense to purchase as much of the asset class as they can.
Michael Saylor, the chief executive of MicroStrategy Inc., has announced that the business intelligence software company is considering issuing more debt to help finance the firm’s purchase of more Bitcoins as part of its corporate strategy.
During an interview at the Bloomberg crypto summit on Thursday, February 25, Saylor said: "We've been pretty clear that we'll consider equity and debt financings. It makes sense to buy as much of that asset class as we can."
So far, MicroStrategy has issued two rounds of convertible senior notes to buy more of the digital assets. On February 19, the company completed its offering of $1.05 billion in convertible bonds, a raise that allowed the software firm to buy another $1 billion in Bitcoins. In December last year, the firm sold $400 million in convertible bonds and then bought $10 million worth of Bitcoin.
As of February 24, MicroStrategy owns 90,531 Bitcoins, after investing about $2.2 billion worth of Bitcoin in total since it began buying the cryptocurrency in August last year. Now, these holdings are worth around $4.5 billion.
During the interview, Saylor stated that the crypto’s finite number is one of the factors that made the leading cryptocurrency valuable. He described Bitcoin as “the scarcest asset in the world.” He added: "If you want to preserve shareholder value, you have to hold scarce assets. Bitcoin is the most liquid, scarce, uncorrelated asset you can buy."
There are only 21 million Bitcoins that can be mined in total and currently, 18 million have been mined so far. This leaves about 3 million Bitcoins that are yet to be introduced into circulation. The last Bitcoin will be mined on May 7th 2140.
Saylor further said that companies should keep up with the cost of capital and work with institutional-grade custodians to hold their Bitcoins safely.
Bitcoin as The Next Big Treasure
Saylor has been one of the greatest supporters of converting the company’s cash reserves into Bitcoin, saying that the Federal Reserve relaxing its inflation policy helped to convince him to invest his company reserves into the crypto asset.
Saylor views the cryptocurrency as a hedge against a potential devaluation of the US dollar. So far, a number of firms have followed his Bitcoin’s strategy. Early this month, Tesla announced that it invested $1.5 billion of its $19 billion cash reserve into Bitcoin.
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