The term loan from Silvergate Bank can also be used for general corporate purposes.Read MoreFeedzy
MacroStrategy, a subsidiary of MicroStrategy (MSTR), has received a $205 million term loan from crypto payments provider Silvergate Bank (SI).
The loan was given through the Silvergate Exchange Network (SEN) Leverage program, which issues U.S. dollar loans using bitcoin as collateral. The loan was collateralized with approximately $820 million worth of bitcoin, according to a regulatory filing.
Shares of MicroStrategy were flat during pre-market trading.
Business intelligence software company MicroStrategy has become known more for its embrace of bitcoin. In the fourth quarter, the company had to take a nearly $150 million impairment charge on its bitcoin holdings due to the price drop.
The interest-only loan is secured by a certain portion of bitcoin held in MacroStrategy’s collateral account, which has a custodian agreed upon by both parties.
MacroStrategy can use the loan to purchase bitcoins, pay interest and fees related to the loan or for MacroStrategy’s or MicroStrategy’s general corporate needs.
Launched in 2020, Silvergate’s SEN Leverage program had $570.5 million in commitments at the end of last year, according to the press release.
“The SEN Leverage loan gives us an opportunity to further our position as the leading public company investor in bitcoin,” said MicroStrategy CEO Michael Saylor in the press release. “Using the capital from the loan, we’ve effectively turned our bitcoin into productive collateral, which allows us to further execute against our business strategy.”
DISCLOSURE
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
The Bitcoin network has witnessed a surge in trading activity in the days after the…
According to the latest on-chain revelation, the Bitcoin network has been experiencing a steady decline…
Crypto expert Peter Brandt has boldly claimed that the Bitcoin top for this market cycle…
The cryptocurrency world is abuzz with speculation after a deep learning model projected a dramatic…
Following a pullback, the price of Bitcoin has continued on its downward movement. The coin,…
A bull flag recently formed on the Bitcoin chart, raising the possibility of a trend…