MicroStrategy, a computer software company, recently made a bold move by paying off its $205 million Bitcoin-collateralized debt with the now-defunct Silvergate Bank. The company didn’t stop there: it also proceeded to acquire new Bitcoin.
MicroStrategy Repays Silvergate Bank Loan
This Monday, March 27, Michael Saylorone of the co-founders of MicroStrategy, announced on Twitter that his company had cleared its $205 million debt with the failed bank Sylvergate.
Saylor a specified have submitted a Form 8k to the Securities and Exchange Commission of the United States in accordance with the payment procedure. He also noted that MicroStrategy had repaid the amount loaned by Sylvergate Bankabout a year ago, with a reduction of 22%, which corresponds to an amount of $161 million.
In addition, the company made a significant investment in Bitcoin. It bought 6,455 BTC from February 16 to March 23, for a total cost of $150 million, at a average price of about $23,238 per bitcoin.
This acquisition adds to the amount of bitcoins already held by the company. This brings its total inventory to 138,955 bitcoins, acquired for $4.1 billion at a average price of $29,817 per bitcoin.
Microstrategy settles its obligations before the due date. The work of Bitcoin?
After purchasing several Bitcoins at $23,238, MicroStrategy recently paid off its Bitcoin debt to Silvergate Bank. It’s possible that the slight increase in the current market price of BTC helped facilitate the repayment.
Indeed, MicroStrategy, had a $5 million account at Silvergate, and 34,619 BTC served as collateral for the loan as of March 24, as collateral for the $205 million debt.
The loan agreement was made under the Silvergate Exchange Network Leverage program. Under the terms of the agreement, MicroStrategy was to repay its loan after three years, or March 23, 2025. However, last week, the two parties agreed to an early repayment.
As the bank struggles to survive, MicroStrategy has remained firm in its belief that Bitcoin is the future of finance and currencies. As the largest holder of BTC, the company continues to invest in the cryptocurrency in the belief that Bitcoin is the next global store of value.
Coming from a journalism university background, I came across Bitcoin and cryptocurrencies not long ago.
The potential of the Blockchain seduced me and I made it my research topic.
