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MicroStrategy May Own $3.5 Billion in Bitcoin If $900 Million Purchase Goes As Planned

February 17, 2021 at 19:44 by Ibrahim Anifowoshe

After Microstrategy’s announcement on Tuesday, February 16, that it was planning to buy $600 million in Bitcoin through a sale of convertible notes, the investment and business intelligence firm has now upped its purchase plans by an additional $300 million. 

Today, following Bitcoin’s breaking a new ATH of $51,300, Microstrategy said that it would be selling $900 million in convertible notes due in 2027 in a private offering to qualified institutional buyers. From estimates, the proceeds from the sale will be around $879.3 million. However, it noted that the estimates could be as high as a $1 billion if buyers decide to exercise their option to purchase additional notes. This will be after deducting the initial purchasers’ discounts and commissions and estimated offering expenses to be paid by Microstrategy. 

According to the announcement, the offering is supposed to close on Friday. If the purchase goes as planned, Microstrategy could soon have an additional $19,000 BTC in its coffers. 

The initial offering of $250 million in BTC from the firm in August, 2020 has more than doubled. Since then, it has purchased $175 million in September, and through issuance of bonds, another $650 in December. In early January, the Michael Saylor led firm purchased  $10 million (or 314 in BTC), and another $10 million (or 295 BTC) on February 2.  

Microstrategy is not the only one shaping the coin

It appears that institutional investors demand for the coin has continued to shape the king cryptocurrency. 

Tesla’s BTC purchase and Mastercard’s entrance into the market were also significant in shaping sentiment and outlook toward the coin. Post-Tesla‘s purchase news, the market expected the benchmark cryptocurrency to break the psychological barrier of $50,000. But it retrenched after an almost $2 billion liquidation on exchanges overnight. 

MicroStrategy’s announcement of a plan to purchase $600 million BTC earlier might have triggered Bitcoin into breaking the psychological barrier of $50,000. A similar announcement on December 7, 2020, forced Bitcoin to break the major hurdle of $20,000.

Since Bitcoin broke a new record today, it seems that institutional investors are looking to put in more investment into the coin. MicroStrategy’s purchase would give it control over 0.48% of total Bitcoin in circulation if the purchase go as planned. 

If you have any questions and comments on Bitcoin today, use the form below to reply.

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