The price of BTC might be exceeding and settling an amount that could surpass $ 50,000 per unit. MicroStrategy keeps investing in bitcoin regardless of its price.
MicroStrategy announced the sale of USD 600 million in bonds to make a large investment of this cash to buy bitcoins (BTC).
The investment firm will issue some senior convertible bonds or notes and put them on offer, as reported in a recent statement. Senior bonds allow users to quantify a company’s debts and make these amounts exchangeable for cash at a time in the future. This action can prevent losses in the event of bankruptcy or forced liquidation of the company, indicates Investopedia.
The senior bonds that MicroStrategy is about to sell will “mature” on February 15, 2027. Investors then could claim them or turn them into cash, as the terms command during the bond sale period, which will last until the end of such period.
The conversion rates and the interest rate would become negotiable once there is an agreement about a price per bond between the involved parties. The bonds will appear in the market to qualified institutional investors under Regulation 144A of the United States Securities and Exchange Commission (SEC).
“All offers in these notes will happen by employing a private memorandum,” MicroStrategy stated, noting that this announcement does not constitute a formal offer yet.
MicroStrategy clarifies in the official statement that its main plan is to issue another $ 90 million in senior bonds so the company can invest in bitcoin at the end of this initial round of sales. It also solely depends on how favorable the market conditions would be. If the company achieves its goals, it will be able to buy around $ 700 million in cryptocurrency, adding more funds to MicroStrategy’s reserve of more than 70,000 BTC.
Bitcoin is Approaching $ 50,000
Although the bitcoin’s price (BTC) is currently reaching $ 50,000, according to CoinMarketCap, this surge has led many users in the ecosystem to enthusiasm and hopes.
However, the investment firm’s decisions have been awaking the interest of both users and Bitcoin enthusiasts as well as other essential institutions. On February 3-4, 2021, MicroStrategy organized the “Bitcoin for Corporations” event, where various aspects of Bitcoin and its powers as a store of value went under debate. Some traders or investors claim that buying assets is a better option, especially when those assets appear at a low price in the market. These traders also claim that they recommend this with the expectation of those assets to grow.
MicroStrategy follows a disciplined strategy without bowing to the market; its directors think it is still early to invest in BTC.
The company first stated that it bought BTC at an estimated price of $ 10,000 in August of last year, which would undoubtedly multiply its fiat-denominated earnings five times at this time. This enthusiasm by MicroStrategy and its CEO Michael Saylor for Bitcoin coincides with other giants like Elon Musk’s Tesla, which recently bought more than $ 1.5 billion worth of BTC last week.
By: Jenson Nuñez
