MicroStrategy Repays $205M to Silvergate Bank, Buys More BTC
- MicroStrategy has purchased an additional 6,455 BTC for $150 million, or an average price of $23,238 per coin as of March 23.
- The business intelligence software company has also repaid its $205 million term loan to Silvergate Bank which it used to purchase additional BTC in March 2022.
- The term loan was paid at a discount of 22%, according to Michael Saylor, the Executive Chairman and former CEO of the company.
- The company now holds around 138,955 BTC, purchased for $4.1 billion at an average of $29,817 per coin, and is very close to the break even point.
MicroStrategy, a company known for providing business intelligence software and related services, has been the biggest supporter of Bitcoin (BTC), the world’s biggest crypto coin by market capitalization. The company continued to purchase BTC despite the crypto winter being in full effect last year. According to an announcement from Michael Saylor, the former CEO and the Executive Chairman of the company, MicroStrategy has purchased an additional 6,455 BTC for $150 million, or at an average price of $23,238 per coin as of March 23.
According to the announcement from Saylor via his official account on the social media platform Twitter, the company has also repaid the loan that it took last year to purchase additional BTC. It is important to mention here that MicroStrategy took out a term loan of $205 million from the troubled crypto bank Silvergate to purchase additional BTC in March 2022.
It was confirmed at that time that the interest-only term loan was secured by a certain amount of Bitcoin held in a collateral account belonging to MacroStrategy with a custodian that was mutually authorized by Silvergate and the business intelligence software company. The loan amount was used to purchase BTC and to pay fees, interest, and expenses related to the loan transaction.
As per a post from MicroStrategy, the company now holds around 138,955 BTC, purchased for $4.1 billion at an average of $29,817 per coin. Taking into account the recent Bitcoin rally, the business intelligence software company has nearly achieved the break even point for its investment in BTC after suffering losses in the billions in 2022 following the collapse of stablecoin Terra UST and the collapse of crypto exchange FTX.
Saylor confirmed that MicroStrategy repaid the loan to Silvergate Bank at a discount of 22%, a great deal for the company. On the other hand, a Twitter user by the name of @albyva pointed out that the market valuation of Saylor’s company is around $3 billion while it holds close to $4 billion in BTC. He stated that this is a red flag for the company, implying that there is something wrong with the business of MicroStrategy.
It is imperative to mention here that Saylor recently said in an interview that the recent collapses and bankruptcies in the crypto industry are imperative for the digital assets space to grow. The executive said that the price crashes and valuation drops are necessary evils that will help bring in strict regulation and improve the quality of services provided by crypto firms.
“The crypto meltdown was painful in the short term, but it’s necessary over the long term for the industry to grow up,” said Saylor, while adding:
“What [the industry] needs is adult supervision. It needs the Goldman Sachs and the Morgan Stanleys and the BlackRocks to come into the industry. It needs clear guidelines from Congress. It needs clear rules of the road from the SEC.”
The “meltdown,” as per Saylor’s statement, was responsible for educating crypto entrepreneurs and investors and revealed that “time for the world to provide a constructive, transparent framework for digital assets” has come, enabling the world to move “into the 21st century.”
As reported earlier by BitcoinWisdom, Silvergate Bank collapsed after it postponed the filing of its annual 10-K financial report. MicroStrategy, Tether, and Circle were among the companies that distanced themselves from the crypto bank. Silvergate Capital Corporation, the parent company of the bank, decided to liquidate the bank at the end.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
