MicroStrategy Considers $1.75 Billion Notes Offering to Expand Bitcoin Holdings

By: Eliza Bennet

MicroStrategy, known for its strategic embrace of Bitcoin, has announced plans to issue $1.75 billion through zero-coupon senior convertible notes as a means to support its growing Bitcoin acquisitions and business initiatives. The proposed convertible notes, which mature in 2029, offer a unique approach to raising capital without immediate interest obligations and are targeted primarily at institutional investors. An additional $250 million in notes may be offered to initial investors within a three-day window following the issuance, broadening the scope of the fundraising plan.

This financing move aligns with MicroStrategy’s aggressive approach to augmenting its Bitcoin reserves. Currently, the company holds an impressive 331,200 BTC, constituting 1.58% of Bitcoin’s total supply of 21 million coins. This year alone, MicroStrategy has already bolstered its Bitcoin holdings by acquiring over 142,050 BTC. Of notable mention is the recent addition of 51,780 BTC, bought for $4.6 billion, further evidencing its commitment to the cryptocurrency.

If MicroStrategy's plans come to fruition, the $1.75 billion capital raise could enable the company to purchase an estimated 19,000 additional Bitcoins, assuming market prices remain around their current levels. At present, the company's holdings, originally accrued at an average price of $49,875 per Bitcoin, have escalated in market value to exceed $30 billion at today’s price levels. These strategic activities are part of MicroStrategy's broader goal to potentially secure up to 2% of Bitcoin's total supply, positioning the firm as one of the most potent institutional Bitcoin holders globally.

Through this expansion drive, MicroStrategy exemplifies its belief in Bitcoin as a viable store of value, a hedge against inflation, and a long-term capital appreciation asset. As they continue to explore innovative funding options like convertible notes, the company remains a prominent example of corporate Bitcoin adoption, potentially influencing other institutional investors to follow suit in leveraging cryptocurrencies for business enhancement.