MicroStrategy, a well-known Bitcoin [BTC] development company listed on Nasdaq, has announced its intention to offer $700 million in convertible senior notes maturing in 2028.
This declaration arrives at a juncture where BTC’s price is encountering resistance near the $60,000 level.
Despite this, the digital currency exhibited positive movement, with its price climbing by 1.02% in the last 24 hours to reach $59,173.
Nevertheless, opinions within the Bitcoin community are divided.
As per CoinMarketCap, 42% of investors are optimistic about BTC, while 58% hold a pessimistic view, showcasing the uncertainty prevailing in the market.
Approach of Microstrategy towards Bitcoin
As per the official announcement, these notes will be accessible through a private offering to institutional investors who meet the criteria under Rule 144A of the Securities Act of 1933.
Convertible senior notes represent a type of debt that can be transformed into equity (company shares) under specific conditions, and being “senior” implies they take precedence over other debts in case of liquidation.
The exclusive nature of this offering, targeted at eligible institutional buyers, enables the company to sidestep more exhaustive public offering norms, with the aim of raising funds through this debt instrument while granting investors the choice to convert it into company shares.
Reactions from the Community
Nonetheless, Bitcoin critic Peter Schiff seemed unimpressed by this progress, as evidenced by his post on Y, where he highlighted,
“Not again. What transpires when MSTR emerges as the sole remaining buyer? There exists a limit to the amount of debt MSTR can issue to prevent the pyramid from crumbling.”
Amid these ongoing updates, Ecoinometrics also disclosed that MicroStrategy now commands an impressive 1.17% of the total BTC supply.
The company is consistently expanding its Bitcoin reserves, positioning itself ahead of the majority of BTC ETFs in terms of assets.
Other Companies Following Microstrategy’s Lead
Subsequent to MicroStrategy’s audacious Bitcoin plan, other companies have started to emulate similar strategies.
Metaplanet, a publicly traded investment and consultancy organization located in Japan, is continuing its “buy the dip” strategy despite BTC’s recent challenges.
Recently, the company procured an additional 38.46 BTC for $2.1 million, elevating its total Bitcoin holdings to almost 400 BTC, valued at roughly $23 million.
Since initiating its BTC investment strategy in April, Metaplanet’s stock price has surged by 480%, according to MarketWatch.
In contrast, MicroStrategy’s stock observed a 4.91% decline on 17th September, although it has soared by 294.98% in the past year, according to Google Finance.
Hence, MicroStrategy’s consistent accumulation of Bitcoin reinforces its enduring dedication to the cryptocurrency, affirming its status as one of the primary institutional participants in the digital asset sphere.