MicroStrategy, a company known as the largest corporate holder of Bitcoin, prepaid the remaining $161 million on its $205 million loan from Silvergate Bank, a crypto-friendly lender that announced its voluntary liquidation on March 9.
In its filing with the Securities and Exchange Commission (SEC), MicroStrategy disclosed that it has ended its credit agreement with Silvergate Bank and reclaimed the 34,619 BTC pledged as collateral to the loan. The loan, which was taken last March and set to mature in 2025, generated a lot of buzz on crypto Twitter at the time, as it was backed with Bitcoin to buy more Bitcoin, a move deemed by many too risky and degenerate.
“[MicroStrategy’s] innovative approach to treasury management is an exceptional example of how institutions can utilize their bitcoin to support and grow their business,” Silvergate CEO Alan Lane said at the time.
In the same SEC filing, Michael Saylor’s company said it purchased another 6,455 bitcoins between February 16 and March 23 for roughly $150 million at an average price of $23,238 per BTC. MicroStrategy now holds $3.8 billion worth of Bitcoin at an average price of $29,817. The company says it paid an aggregate price of $4.14 billion to build up its BTC reserves.
“What I was doing with Bitcoin, I don’t want to decapitalize the company. I want to keep the capital or grow the capital, but I also want to put an asset on the balance sheet. And I think a big breakthrough is that I can convert my cash from a liability to an asset,” Saylor, a vocal Bitcoin maximalist, shared at the Bitcoin 2021 conference in Miami.
“And then we realized if that asset is going to go up by more than 10% a year and you can borrow money at 5%—or three or four or two—then you should borrow as much money as you can and flip it into the asset. Why wouldn’t you?”