- MicroStrategy is looking to buy more bitcoins.
- The company aims to raise $500 million by selling debt.
- Given the speed at which Bitcoin ETFs accumulate, MicroStrategy’s shopping spree could become trickier.
Just as Bitcoin makes history with its remarkable rally, consistently setting new highs every week, demand for the reigning crypto king surges. Retail investors and institutions are gathering as much capital with one goal in mind: to buy more Bitcoin.
Notable, even MicroStrategy, recognized as the world’s largest publicly traded holder of Bitcoin, is exploring different avenues to accumulate more Bitcoin, presenting an interesting proposition in the process.
MicroStrategy’s Strategy to Buy More Bitcoin
Earlier this month, MicroStrategy announced plans to raise $800 million by selling convertible debt in a private offering, intending to use the funds to buy more Bitcoins.
Sponsored
Following the success of its initial debt offering, the company has decided to expand its fundraising efforts by offering an additional $500 million of its debt to buy more bitcoins, just as the asset topped $70,000 in recent weeks.
The debt offering, structured as senior notes maturing on March 15, 2031, offers investors semi-annual interest payments. Additionally, buyers can convert a portion or all of the notes into cash.
MicroStrategy has consistently accumulated Bitcoin since 2020, amassing over 193,000 tokens valued at $14 billion. However, given the unprecedented demand for Bitcoin, the company’s shopping spree could get trickier.
ETFs Gobble Up Bitcoins
Bitcoin ETF issuers are running amok in the crypto industry, snapping up every available bitcoin. Earlier this month, the investment vehicle surpassed Silver ETFs, amassing over $28 billion in assets under management within two months of trading.
Sponsored
Leading the pack is BlackRock, which held over 197,000 bitcoins, valued at $14.4 billion at press time.
With Bitcoin producing 900 coins daily, a supply crunch looms as institutions race to buy more bitcoins, especially as this number is set to halve post-April.
Analysts express concern that if Bitcoin ETFs continue their shopping spree, their yearly haul could outstrip Bitcoin’s production. The impending supply crunch could later trigger a Bitcoin price explosion, propelling it to unprecedented highs beyond its previous all-time high.
Making matters worse are the rumors of a bitcoin shortage on OTC trading platforms, prompting institutions and large-volume traders to turn to public exchanges like Binance, Bybit, Kraken, and Coinbase. Most of these exchanges have already reported experiencing issues in the face of the rising demand.
On the Flipside
- On Tuesday, Coinbase announced a similar scheme, stating it would sell $1 billion worth of senior notes to institutional buyers.
- Interestingly, despite the overall price increase, over $1.2 billion in Bitcoin liquidations have already occurred this month.
Why This Matters
MicroStrategy has long reigned as one of the largest Bitcoin holders. However, its influence is waning in the face of Bitcoin ETF issuers rapidly accumulating bitcoins. The debt raise presents an opportunity for the firm to bolster its position in the market and expand its holdings while Bitcoin continues its ascent.
Do NFTs need new copyright laws?
NFTs Do Not Need Separate Copyright Laws: US Govt Study
Read more updates about Genesis’ case:
SEC’s Case Against Gemini Survives Genesis’ Motion to Dismiss
