- Michael Saylor’s firm wants to issue more securities to fund its aggressive Bitcoin buying scheme.
- MicroStrategy is now the largest single corporate holder of the cryptocurrency.
MicroStrategy says it plans to raise $42 billion worth of capital over the next three years to buy more Bitcoin.
The company has dubbed the phased plan “21/21″ as it will be split between $21 billion of debt and $21 billion of equity raises.
The plan will ensure that MicroStrategy is not “limited by cash flows from our software business to scale up our Bitcoin capital markets initiatives,” CEO Phong Le told investors during the company’s earnings announcement on Wednesday.
MicroStrategy is now the largest single corporate holder of the world’s most popular cryptocurrency, owning $18 billion at current prices.
While other entities have far more Bitcoin in their wallets — Coinbase, for example, has almost a million Bitcoin, worth about $60 billion — they’re holding it on behalf of others.
Satoshi Nakamoto, Bitcoin’s mysterious founder, holds 1.1 million Bitcoin worth almost $80 billion.
MicroStrategy funds its aggressive purchasing of the cryptocurrency with revenues from its analytics software business, and by issuing equity and debt into the capital markets.
The firm’s stock has become a proxy for investors seeking indirect exposure to Bitcoin. As Bitcoin’s price has blazed past $70,000, MicroStrategy can borrow even more to supercharge its Bitcoin-buying scheme.
Treasury reserve
MicroStrategy founder, chair and president Michael Saylor is one of Bitcoin’s most vocal evangelists.
“We’re going to promote global adoption of BTC as a treasury reserve asset,” he told investors on Wednesday’s earnings call.
“Promote it to countries, promote it to cities, promote it to states, promote it to companies, to public companies, to private companies.”
He is not the only one to promote the idea that both companies and nations should tap into Bitcoin’s potential as a treasury.
US Republican presidential nominee Donald Trump has touted the idea of creating a national stockpile of the digital asset. German independent politician Joana Cotar has urged Berlin politicos to do the same.
Shaky
At times, however, MicroStrategy’s strategy has appeared shaky, as inflation and rising interest rates made it costly for the company to issue debt.
Saylor acknowledged on the call that investors have been “concerned about our ability to raise more capital via equity and debt issuance.”
However, “there’s no reason that we have to stop issuing fixed-income instruments,” he said.
“Some people have asked, ‘Can you keep doing ATMs [securities offering]?’ And I think we put that to rest by filing a $21 billion ATM,” Saylor said.
“We’re going to expand, and we’re going to accelerate our treasury operations and our capital-raising activities based upon the performance you’ve seen and with our newfound insights.”
Crypto market movers
- Bitcoin is trading flat over the past 24 hours at $72,288.
- Ethereum is down 2% to trade at $2,635.
What we’re reading
- Build your own millionaire AI agent — Milk Road
- Reddit Liquidates All of Its Treasury Bitcoin and Ether Holdings — Unchained
- The top 5 beta plays on Solana — Milk Road
- Nishad Singh, FTX’s ‘king of kindness,’ dodges prison for role in exchange’s $8bn fraud — DL News
- Exclusive: Election betting site Polymarket gives Trump a 67% chance of winning but is rife with fake ‘wash’ trading, researchers say — Fortune
Reach out to the author at joanna@dlnews.com.