MicroStrategy Settles Silvergate Loan, Boosts Bitcoin Portfolio: A Deep Dive Into Company's Crypto Strategy

Software firm MicroStrategy MSTR has repaid the outstanding principal on its $205 million loan from the now-defunct Silvergate Bank SI, specializing in cryptocurrency services, as stated in a recent U.S. Securities and Exchange Commission filing.

The company, co-founded by cryptocurrency proponent Michael Saylor, holds a substantial quantity of Bitcoin BTC/USD and disclosed the acquisition of an additional 6,455 Bitcoin, worth approximately $150 million (around $23,238 per coin), over the past five weeks.

The repayment of the loan, amounting to $161 million, took place last Friday.

In settling the loan, 34,619 bitcoins used as collateral were returned to MicroStrategy's possession. The company had secured the loan in March 2022.

The newly acquired 6,455 Bitcoin increases MicroStrategy's total holdings to 138,955 Bitcoin, purchased at an average cost of $29,817 each and valued at nearly $3.88 billion based on the current Bitcoin price of $27,900.

MicroStrategy also revealed that it raised $339.4 million this year through share sales and used the funds to repay the Silvergate loan.

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Last month, MicroStrategy reported a net loss of $249.7 million for Q4 2022, in comparison to a loss of $90 million during the same period the previous year.

The company has gained greater recognition in recent times due to its significant investment in Bitcoin.

MicroStrategy announced the sale of about $340 million in shares as part of a prior share-sale agreement.

The generated proceeds, combined with a portion of the company's cash reserves, were utilized to settle the Silvergate loan.

While MicroStrategy's core business focuses on software, its substantial investments in Bitcoin have brought the company to the forefront of the cryptocurrency industry.

As a result, the firm has become a significant player in the digital asset space, consistently expanding its Bitcoin holdings and maintaining a strong presence in the market.

Despite the reported losses, MicroStrategy remains steadfast in its commitment to Bitcoin, continuing to invest in cryptocurrency as a strategic asset.

The repayment of the Silvergate loan and the acquisition of additional Bitcoin underscore the company's confidence in the long-term potential of digital currencies.

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