MicroStrategy Repays Silvergate Loans, Spends $150 Million to Buy More Bitcoin
Software company MicroStrategy, the largest corporate owner of Bitcoinhas fully prepaid the outstanding balance of $161 million on the $205 million loan from Silvergate Bank.
In doing so, the company terminated its credit agreement with Silvergate and recovered 34,619 BTC held as collateral against the loan, according to a Securities and Exchange Commission filing.
In the same SEC filing, MicroStrategy also revealed that between February 16 and March 23, it spent $150 million to acquire 6,455 more BTC.
The software company made headlines last year when it announced the loan deal because it had secured the loan with Bitcoin so it could buy more Bitcoin. But there were happier times for the world’s largest cryptocurrency. At the time, Bitcoin was trading at more than $42,000 and MicroStrategy’s 128,687 BTC treasury was worth more than $6 billion.
MicroStrategy and its subsidiaries now own a total of 138,955 BTC. The company says it paid a total price of $4.14 billion to buy the BTC holdings. At today’s prices, the stock is worth $3.8 billion.
Microstrategy and Silvergate
For the past couple of weeks, MicroStrategy has been questioning its obligations to Silvergate.
The bank’s parent company, Silvergate Capital, announced on March 8 that it would voluntarily wind up its operations. Despite Disclaimers that MicroStrategy’s loan terms would be unchanged by the bank’s problems, MSTR shares, which trade on the Nasdaq, took a temporary dip.
MSTR shares closed at $232.72 on March 8, but had fallen 17% to $192.01 two days later when Silicon Valley Bank announced it had been placed into receivership by California banking regulators, sparking fears that a broader bank collapse could be on the horizon.
On Monday morning, after MicroStrategy prepaid its Silvergate loan, MSTR shares were trading at $260.21 — up 1% from last week’s close.
Meanwhile, MicroStrategy founder and chairman and Bitcoin maxi Michael Saylor has vehemently touted his favorite digital asset and slammed banks.
Since the closing of Silvergate, Silicon Valley Bank and Signature Bank earlier this month, he is three times shared a diagram on Twitter showing Bitcoin’s performance compared to the S&P 500 index, Nasdaq, gold, bonds and silver.
“Bitcoin is a bank that cannot lend, invest, gamble, dilute, impair, freeze or seize your assets,” he wrote. on Twitter. “It works all the time, everywhere in the world, and is unstoppable.”
