American business intelligence firm Microstrategy’s subsidiary Macrostrategy secured EC $205 million term loan from Silvergate Bank under its Silvergate Exchange Network (SEN) program.
Macrostrategy will leverage a loan to purchase Bitcoin, pay expenditure behind the loan transactions, or its general corporate purposes. Michael Saylor, CEO of Microstrategy, posted a tweet about bitcoin-collateralized loans.
As per the details provided by Microstrategy, Macrostrategy borrowed the interest only-term loan by putting some Bitcoins holding as collateral from their account. To gain trust in a deal, both firms appoint a custodian mutually authorized by Silvergate and Macrostrategy.
“We’re thrilled to add MicroStrategy to our growing list of SEN Leverage borrowers ” said Alan Lane, Chief Executive Officer of Silvergate. “Their innovative approach to treasury management is an exceptional example of how institutions can utilize their bitcoin to support and grow their business.”
It seems like Microstrategy’s Bitcoin bug catches its subsidiary. Since 2020, Microstrategy has been acquiring Bitcoins in different purchases. As per our last report, the last Bitcoin purchase was in February, when Microstrategy acquired additional 660 Bitcoins increasing its total holdings to 125,051.
Silvergate Bank is a subsidiary of a subordinate company of Silvergate Capital Corporation, which provides financial infrastructure solutions and essential services for the booming digital currency industry.
Currently, with the expansion of the digital currency space, the need for capital is also rising. As per last year’s data, SEN Leverage had hiked to nearly $570.5 million in commitments by providing secure, institutional-grade access to capital through U.S. dollar loans collateralized by bitcoin.
“The SEN Leverage loan gives us an opportunity to further our position as the leading public company investor in bitcoin,” said Michael Saylor, Chairman and Chief Executive Officer of MicroStrategy. “Using the capital from the loan, we’ve effectively turned our bitcoin into productive collateral, which allows us to further execute against our business strategy.”
