Key highlights:
- MicroStrategy plans to offer more than $600 million in convertible notes
- The company intends to use the capital to purchase Bitcoin
- The maturation of the notes will be in 2027, but investors can rebuy or redeem according to MicroStrategy’s rules
MicroStrategy is already one of the largest Bitcoin investors, but it seems that the company doesn’t plan on stopping any time soon. Recently, MicroStrategy announced a new plan to offer more than $600 million in convertible senior notes to investors and use the proceeds to purchase even more Bitcoin.
The public statement perhaps helped Bitcoin hit the $50,000 price level for the first time in its history, even though the price proceeded to replace to around $49650. According to MicroStrategy, investors who purchase the notes will will be entitled to interest payments twice a year, on February 15 and August 15. The process will start in the August of 2021. The maturation date of the notes will be in February 2027. But the convertible notes can be rebought or redeemed, according to the rules set by MicroStrategy.
MicroStrategy will utilize the funds to buy more BTC
The first buyers of the notes will have another choice to purchase an additional $90 million during the first 13 days after the notes’ issuance. MicroStrategy wants to use the funds from the sale to buy more Bitcoin.
Microstrategy is only offering the notes to eligible institutional purchasers, and the offering is similar to the previous convertible senior note offering that Microstrategy did last year. MicroStrategy’s BTC holdings total more than 70000 coins at the moment, which translates to over $3 billion at current prices. This amount is only set to grow further dure to the company’s plans to buy even more. The move from MicroStrategy could also encourage other institutions and investors to purchase bitcoin.
Institutions are entering the Bitcoin space, and it means a massive inflow of capital for the relatively small cryptocurrency industry industry. The entrance of firms like MicroStrategy and Tesla to the area could have a snowballing effect, and attracts additional institutional buyers to the market. At the moment, many institutions know about the potential of Bitcoin and cryptocurrencies, and the current bull-run is significantly stronger than in 2017. Bitcoin mass adoption could very well be on the way, and we could see many more institutions coming into the picture soon.
