Micheal Saylor Won’t Mind Borrowing To Increase Microstrategy’s BTC Holdings
Microstrategy boss, Micheal Saylor, has announced that the company increased its BTC holdings earlier this month. Surprisingly, he also stated that he wouldn’t mind using some of the company’s assets to borrow and increase their BTC holdings.
Increasing BTC Holdings Through Loans
Microstrategy has been increasing its BTC holdings over the past 12 months using its “buying the dip” formula. Saylor opined that the company had mastered this method of making BTC purchases and won’t change that anytime soon. Then, he said that Microstrategy’s BTC holdings have increased by 665 BTC (about $26m in value) as of February 1.
Thus, bringing its total BTC holdings to about 125,100 BTC (worth more than $5.5B using the current price for 1 BTC). While this BTC amount may seem large, it is the smallest amount of BTC that Microstrategy has purchased over the last nine months. Hence, some analysts claimed that Microstrategy wouldn’t be buying much BTC henceforth. However, Saylor countered that opinion in a new interview with Bloomberg, claiming that their BTC buys were usually funded with ‘free cash,’ which would continue to be the case.
He further revealed that they could borrow against their holdings to fund their BTC purchases if necessary. Speaking further, Saylor said, “we won’t mind exploring several funding options if we need to be aggressive with our BTC purchases. One of such funding options is to use the yields of our current BTC holdings or get a loan using our BTC holdings as collateral.”
However, the Microstrategy CEO, quickly clarified that they aren’t looking into the loan option. He affirmed that there are other factors (such as risk exposure) that must be considered before making such decisions. “No one should expect an announcement regarding this option soon. Any decision we take would depend on some risk considerations,” he concluded.
Investing In Microstrategy Stocks To Gain BTC Exposure
Explaining the meaning of the free cash flow for BTC purchases he mentioned earlier in the interview, Saylor said that the company funds its BTC purchases using 90% of its earnings from its primary business (cloud subscription services). He also said that Microstrategy had a great 2021 fiscal year as the company experienced a 6.5% increase in sales which boosted its 12-month performance by nearly 40%.
The Microstrategy boss further stated that anyone willing to have BTC exposure without being exposed to the risks could do so by investing in Microstrategy stocks which have been pegged with the leading digital asset because of the company’s huge BTC holdings. He also stated that “Microstrategy is the best option for anyone willing to gain BTC exposure and earn good yields with their investments.”
Saylor remains bullish about the digital asset, telling everyone that one BTC would be worth at least $5.5m within the next decade. He also claimed that many hedge funds had recognized this fact, and that’s why there has been increased institutional investment in BTC than in altcoins. His enthusiasm about the leading digital asset is one of the reasons he was elected to head the North American association of BTC miners.
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