Michael Saylor is perhaps one of the biggest Bitcoin bulls known to mankind and his drive to acquire more and more Bitcoin reflects that. It was yesterday when Saylor announced another big move of MicroStrategy and it comes as no surprise that he bought more BTC again.
How much is MicroStrategy’s Bitcoin stack worth? And what is so special about this most recent deal that Saylor took?
Borrow, buy, rinse and repeat
It is not the first time that MicroStrategy was looking for more capital to support the idea of a Bitcoin-only strategy. In June 2021 the company raised over $400 million with senior secured notes and as soon as the capital became available, they bought another stack of BTC.
This is going on for quite some time and somehow it seems that it’s not breaking news any longer when Saylor’s company is buying again. Still, this is different because at the end of last month MicroStrategy took out a loan with Silvergate bank. Another $205 million in the company’s pocket has been backed by MicroStrategy’s Bitcoin holdings.
That’s right, the company is using Bitcoin as collateral to buy even more BTC. While critics have raised the point that this is not sustainable, we might see more of those deals in the future. In fact, should the price of Bitcoin rise it seems to be justified to borrow more money against it. It’s the ultimate bet against the US-Dollar.
“There is no second-best crypto-asset”
According to Saylor Bitcoin is the hardest money on earth and it seems that he will go above and beyond to acquire as much as he can. With his recent move MacroStrategy, a subsidiary of MicroStrategy bought another 4.167 BTC for $190 million which results in an average price of $30.700 per Bitcoin.
At the time of writing the company is holding a total of 129.187 BTC worth almost $6 billion through its subsidiary. It remains to be seen if Saylors bet will be successful. The most recent price moves of Bitcoin betrayed that the market reacts to events outside of the crypto space and that there is a correlation between US stocks and Bitcoin.
On the other hand, the narrative of Bitcoin as an inflation hedge remains untouched. Should the Fed be unable to fight inflation or measure proved to be ineffective then Bitcoin could be indeed the answer to the problems investors are facing. The downside of this bet is that MicroStrategy has become entirely dependent on its success. Should BTC take another dive down to the “25k” area as some analysts believe, the position of MicroStrategy would be at a loss. But we all know what would most likely follow. Saylor would simply start buying the dip.