MicroStrategy (MSTR), a software company in the United States is breaking records as the sole corporation cultivating institutional interest in Bitcoin-linked convertibles.
MicroStrategy is Making History With Bitcoin Debt Strategy
The firm has proved to be beyond a regular software company to become one of the largest institutional holders of Bitcoin (BTC). This bullish move has not only demonstrated the potential of Bitcoin as a store of value but also positioned MicroStrategy as a notable player in the crypto space.
In a research report, Bernstein Analysts stated that the firm is pioneering the BTC capital market. Also, no other company currently has an active Bitcoin investment strategy capable of attracting significant capital as MicroStrategy does.
Last month, it was reported that the American-based intelligence firm planned to enter into a debt of $500 million to buy more BTC. The firm planned to raise this fund through Convertible Senior Notes which will mature by 2032. These special notes are debt securities that may be transformed into shares.
MicroStrategy’s smart use of convertible debt allows it to benefit from Bitcoin’s potential upside while managing liquidation risk by issuing new debt when Bitcoin rises and new shares when it falls.
Bitcoin Is The New Gold
The firm has experienced a significant growth in the value of its Bitcoin holdings, reaching nearly 67% which amounts to almost $13 billion since it began the purchase in 2020.
The sole reason the firm is bullish on Bitcoin hinges on is its potential to outperform traditional assets, function as a valuable treasury asset, and serve as a hedge against inflation.
Currently, Bitcoin is ranked higher than three prominent institutions. In a contrasting view, the trajectory of the digital asset has been declining in the past week.
Many analysts believe that it is influenced by the slowing popularity of Spot Bitcoin ETFs which experienced an outflow streak of funds in the past week.
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