MacroStrategy, a subsidiary of MicroStrategy, has taken a loan of $205 million term loan to acquire Bitcoin

MacroStrategy, a subsidiary of MicroStrategy (MSTR), has received a $205 million term loan from Silvergate Bank (SI) crypto payments provider. So, it has taken a Bitcoin-collaterized loan to stock up on BTC.

MicroStrategy unit gets $205 million collateral loan from silvergate to buy Bitcoin

The loan was given through the Silvergate Exchange Network (SEN) Leverage program, issuing U.S. dollar loans using bitcoin as collateral. The loan was collateralized with about $820 million worth of Bitcoin Shares of MicroStrategy were unchanged during pre-market trading.

MicroStrategy, a software company, has been better known for its bitcoin capture. During the fourth quarter, the company incurred a loss charge of nearly $150 million in bitcoin holdings due to the drop in the cryptocurrency’s price.

An interest-only loan secured by a certain portion of BTC is held in a MacroStrategy collateral account, which has a custodian that both parties have agreed to. MacroStrategy may use the loan to purchase bitcoin or pay the interest and fees associated with the loan or for the general needs of MacroStrategy or the company’s MicroStrategy.

According to the press release launched in 2020, Silvergate’s SEN Leverage program had a commitment of $570.5 million at the end of last year.

“The SEN Leverage loan allows us to further our position as the leading public company investor in bitcoin,” MicroStrategy CEO Michael Saylor said 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.”

On Feb. 1, Michael Saylor’s business intelligence giant MicroStrategy purchased another Bitcoin lump worth $25 million – 660 Bitcoin. The company now holds $4.8 billion worth of the leading digital currency.

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