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$205 million loan: MicroStrategy subsidiary plans to buy Bitcoin (BTC)



 MacroStrategy, a subsidiary of business intelligence firm MicroStrategy, is looking to buy Bitcoin. To that end, she secured a multimillion-dollar loan from Silvergate Bank.


In a note Tuesday , MicroStrategy stated that Silvergate issued a $205 million loan "secured by certain bitcoins held in MacroStrategy's security account." Subsidiary MacroStrategy plans to use this loan to buy Bitcoin ( BTC ) and pay fees and interest related to the loan. The money is also used for general corporate expenses.


"The loan from SEN Leverage allows us to expand our position as a leading investor in Bitcoin," said Michael Saylor, CEO of MicroStrategy. "With the capital afforded by the loan, we have effectively turned our bitcoins into productive collateral that we can use to continue executing our business strategy."



Launched in 2020, the Silvergate Exchange Network Leverage Service offers companies the opportunity to obtain BTC-backed loans in US dollars. According to the bank, as of Dec. 31, there were more than $570 million in loan commitments.


Since its initial $250 million BTC investment in August 2020 , MicroStrategy has billions in Bitcoin following multiple purchases using the company's cash and proceeds from the sale of convertible senior notes in private offerings to institutional buyers. At the current BTC price of $ 47,806, the company's 125,051 coins are worth around $6 billion.

Silvergate has already advanced capital to many companies in the crypto and blockchain industries. In October, the bank provided crypto mining company Marathon Digital with a $100 million line of credit to use to fund operations and expand BTC mining. Crypto.com announced a partnership with Silvergate in November . This allows institutional customers to make deposits and withdrawals from the crypto exchange in US dollars.

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