MicroStrategy subsidiary "MacroStrategy" secures a loan of over a hundred million dollars to continue buying Bitcoin.

The publicly traded software developer MicroStrategy, which continues to buy Bitcoin as part of its asset reserves, has announced that its newly formed subsidiary "MacroStrategy" has secured a $205 million loan financing. The CEO stated that the funds will be used to acquire more Bitcoin.

Crypto Collateralized Loan

According to an announcement, a $205 million loan is provided by the crypto bank Silvergate through its leverage program, collateralized by Bitcoin valued at $820 million held by "MacroStrategy," with Silvergate and MacroStrategy both authorized as the anonymous custodians.

The loan program is based on the Silvergate Exchange Network (SEN), providing institutional borrowers with collateralized Bitcoin loans. The SEN is essentially a collective of crypto exchanges, provided by Silvergate to their clients.

Alan Lane, CEO of Silvergate, stated:

We are pleased to welcome MicroStrategy to our growing list of borrowers. Their innovative approach to treasury management is a unique case of how institutions can leverage Bitcoin to expand their business.

Under the terms of the agreement, MacroStrategy will use the loan funds for:

1. Purchasing Bitcoin.
2. Payment of loan-related interest and fees.
3. General corporate purposes for MacroStrategy and MicroStrategy.

Michael Saylor, CEO of MicroStrategy, noted:

We effectively convert Bitcoin into productive collateral, and with the funds obtained through the loan, we can execute further strategic initiatives.

Current Status of MicroStrategy

MicroStrategy first purchased Bitcoin in August 2020 and currently holds 125,051 BTC, accounting for nearly 0.6% of the circulating supply, almost three times the holdings of the second-place Tesla, valued at nearly $6 billion as of the deadline.

"MacroStrategy" was established in June last year, and at that time already held approximately 92,079 BTC of MicroStrategy. According to the fourth-quarter financial report from last year, "MacroStrategy" now holds 110,942 BTC.

The cost of MicroStrategy's Bitcoin is around $3.8 billion, with current profits close to $2 billion. Its stock price also closely follows the trend of Bitcoin, dropping from $885 on 11/9 last year to a low of $310 on 1/28 this year, with a 68% increase since then.