{"id":276157,"date":"2021-06-16T17:07:00","date_gmt":"2021-06-16T14:07:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/bullish-all-the-way-microstrategy-doubles-down-on-its-bitcoin-bet\/"},"modified":"2021-06-16T17:07:00","modified_gmt":"2021-06-16T14:07:00","slug":"bullish-all-the-way-microstrategy-doubles-down-on-its-bitcoin-bet","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/bullish-all-the-way-microstrategy-doubles-down-on-its-bitcoin-bet\/","title":{"rendered":"# Bullish all the way? MicroStrategy doubles down on its Bitcoin bet"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a373ba0c50b0\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a373ba0c50b0\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/bullish-all-the-way-microstrategy-doubles-down-on-its-bitcoin-bet\/#MicroStrategys_move_smart_or_not\" >MicroStrategy\u2019s move smart or not?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/bullish-all-the-way-microstrategy-doubles-down-on-its-bitcoin-bet\/#Is_Bitcoin_severely_undervalued\" >Is Bitcoin severely undervalued?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/bullish-all-the-way-microstrategy-doubles-down-on-its-bitcoin-bet\/#The_road_ahead_for_MicroStrategy_and_Bitcoin\" >The road ahead for MicroStrategy and Bitcoin<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/bullish-all-the-way-microstrategy-doubles-down-on-its-bitcoin-bet\/#A_risky_bet\" >A risky bet?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Bullish all the way? MicroStrategy doubles down on its Bitcoin bet <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDYvYjY5MTBiNjEtYzBlNC00MjJkLTlmYjctMDE3NjA4YTY3Nzg5LmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-5a136f3a>There\u2019s never a dull day when it comes to crypto as was exemplified recently when the digital asset market dipped by around 50%, eventually taking the total capitalization from its all-time high of $2.5 trillion to around $1.7 trillion.\u00a0<\/p>\n<p>As was expected, in the wake of all this turbulence, Michael Saylor-led business intelligence firm MicroStrategy announced that it was all set to \u201cbuy the dip\u201d \u2014 successfully concluding its $500-million offering of secured notes.<\/p>\n<p>To further elaborate on the matter, per a statement <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.microstrategy.com\/content\/dam\/website-assets\/collateral\/financial-documents\/press-release-archive\/microstrategy-completes-500m-offering-of-senior-secured-notes-due-2028-with-bitcoin-use-of-proceeds_06-14-2021.pdf\">released<\/a> by the company, it was revealed that MicroStrategy had been able to facilitate a sale of $500 million worth of \u201csenior secured notes\u201d via a private offering to a set number of buyers based out of the United States. Of the above-stated total, after expense deductions, initial purchaser discounts and commissions are taken into consideration, the net total will work out to $488 million, the entirety of which will be used for additional Bitcoin (BTC) acquisition by the firm.<\/p>\n<p>To quickly recap MicroStrategy\u2019s recent crypto purchasing efforts, it should be highlighted that since August of last year \u2014 a time when the firm bought $250 million worth of BTC \u2014 the company has been on a Bitcoin-buying frenzy, as is highlighted by the fact that the firm <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/michael_saylor\/status\/1394625128257007618\">holds<\/a> a total of 92,079 BTC, which works out to nearly $3.8 billion.<\/p>\n<p>Lastly, it bears mentioning that if BTC\u2019s value continues to hover around the $40,000 zone, MicroStrategy will most likely be able to add around 11,900 Bitcoin to its balance sheets, bringing the company\u2019s total crypto haul to over $4.2 billion.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"MicroStrategys_move_smart_or_not\"><\/span>MicroStrategy\u2019s move smart or not?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>On June 7, MicroStrategy announced the launch of the aforementioned private offering, initially stating that it was looking to raise around \u201c$400 million aggregate principal amount\u201d; however, as highlighted previously, this number now stands close to $500 million. What\u2019s more, following the announcement, Michael Saylor claimed that his company had already received $1.6 billion worth of orders for their latest offering \u2014 i.e., four times the initial amount.<\/p>\n<p>Kadan Stadelmann, chief <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> officer of Komodo \u2014 a blockchain solutions provider \u2014 told Cointelegraph that MicroStrategy\u2019s move isn\u2019t that surprising, especially when considering that its newly formed subsidiary, MacroStrategy LLC., already owns a lot of BTC, adding:<\/p>\n<blockquote><p>\u201cMichael Saylor is clearly focused on a long-term investment strategy rather than short-term gains or losses. Putting company debt on the line is risky, but it could obviously lead to a massive return as well.\u201d<\/p><\/blockquote>\n<p>In this regard, it bears mentioning that the development has clearly had a positive impact on the Bitcoin market. In confluence with other positive <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a>, the price of BTC has jumped from just over $35,000 to over $40,000 since the announcement. \u201cThe market does <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ear bearish overall despite this news, but one or two more stories of major institutional adoption of Bitcoin or other cryptos could very well bring the bull market back,\u201d Stadelmann concluded.<\/p>\n<p>Similarly, Konstantin Anissimov, executive director for cryptocurrency exchange CEX.IO, told Cointelegraph that the consistency with which MicroStrategy has continued to amass Bitcoin has been contagious, to say the least. In his view, the $500-million bond strategy is a means of emphasizing the company\u2019s highly futuristic outlook:<\/p>\n<blockquote><p>\u201cMicroStrategy appears to be seeing a very promising future for Bitcoin that no one else is seeing. While these moves may not in themselves move the price of Bitcoin, MicroStrategy will be one of the biggest beneficiaries when prices get to trade above previous all-time highs.\u201d<\/p><\/blockquote>\n<h3><span class=\"ez-toc-section\" id=\"Is_Bitcoin_severely_undervalued\"><\/span>Is Bitcoin severely undervalued?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>MicroStrategy\u2019s continued crypto accrual raises a pertinent question: <em>Is Bitcoin undervalued right now?<\/em> Daniel Peled, co-founder of Ethereum-based interoperable blockchain platform Orbs, told Cointelegraph that he is mightily impressed with Saylor\u2019s conviction regarding Bitcoin as well as his <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a> treasury management decisions, especially during these times of unprecedented quantitative easing, adding:<\/p>\n<blockquote><p>\u201cThe market currently undervalues BTC, based, among other things, on the high deflection from the stock-to-flow model, the NVT signals, and the fact that Elon Musk confirmed that Tesla has not sold any of its remaining BTC and may accept BTC as payment if enough miners will transition to clean energy.\u201d<\/p><\/blockquote>\n<p>Peled further opined that MicroStrategy has added to this excellent timing by setting up its bond offering, ensuring that only the BTC purchased with the proceeds from the offering are senior secured and that the annual interest rate is significantly below the company\u2019s annual profit levels, giving it the ability to cover its payments at least for the foreseeable future. <\/p>\n<p>The above-highlighted structure effectively limits the ability of the company\u2019s core business and assets to be negatively affected, particularly if its bet on buying additional BTC doesn\u2019t pay off. \u201cIt sets up MicroStrategy to enjoy the benefits when the BTC market corrects to reflect the fundamentals,\u201d Peled believes.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_road_ahead_for_MicroStrategy_and_Bitcoin\"><\/span>The road ahead for MicroStrategy and Bitcoin<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>When MicroStrategy kicked off its plan to start buying crypto via its first corporate bond issuance scheme, Bitcoin\u2019s value was hovering at around the $17,000 threshold only to explode by nearly four times over the course of the next few months. Thus, it stands to reason that the firm probably sees big things for BTC in the near to mid-term, especially after this period of ongoing turbulence subsides.<\/p>\n<p>Also, as pointed out earlier, owing to the fact that MicroStrategy\u2019s latest offering was reportedly oversubscribed upon its launch, there still seems to be a large appetite for Bitcoin across the global investor landscape. Not only that, even the United States Security and Exchange Commission\u2019s decision regarding VanEck\u2019s Bitcoin ETF application is currently pending, which, if approved, may serve as another catalyst for continued BTC adoption.<\/p>\n<p>Steven Gregory, CEO of cryptocurrency exchange Currency.com\u2019s U.S. subsidiary, told Cointelegraph, \u201cThe one almost ironic event to come out of this bond issuance is the Fed unknowingly having exposure to this round through their junk-buying program.\u201d <\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>GME and AMC stock surge may impact crypto meme coins, BTC not so much?<\/em><\/strong><\/p>\n<p>Jack Tao, CEO of cryptocurrency exchange Phemex, believes that this move is consistent with the overall trend of institutional money flowing into crypto. However, what\u2019s striking to him is the fact that all of these developments are taking place despite the persisting bearish conditions, as he told Cointelegraph: \u201cMany in the world of traditional finance are starting to realize crypto\u2019s potential to ignite an unprecedented paradigm shift. They\u2019re beginning to invest into the technology rather than just chasing speculative profits.\u201d<\/p>\n<h3><span class=\"ez-toc-section\" id=\"A_risky_bet\"><\/span>A risky bet?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>MicroStrategy\u2019s decision to borrow from the corporate junk bond market to finance its BTC acquisition seems to clearly reflect heavily on the U.S. Federal Reserve\u2019s <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nytimes.com\/2021\/06\/15\/opinion\/inflation-federal-reserve-powell-biden.html\">current<\/a> inflationary \u201cquantitative easing\u201d policy that was designed to help soften the blow inflicted by the COVID-19 pandemic on the American economy.<\/p>\n<p>In fact, the numbers say it all, as is best highlighted by the fact that corporate borrowing has never been easier. For example, MicroStrategy\u2019s latest offering promises a 6.25%\u20136.5% yield compared to the average junk bond yield of 4.01%. <\/p>\n<p>Therefore, it will be interesting to see whether others follow in Saylor\u2019s footsteps and continue to accumulate Bitcoin, especially after it was recently announced that El Salvador was going to start accepting the flagship crypto as legal tender.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/bullish-all-the-way-microstrategy-doubles-down-on-its-bitcoin-bet\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Bullish all the way? MicroStrategy doubles down on its Bitcoin bet &#8221; There\u2019s never a dull day when it comes to crypto as was exemplified recently when the digital asset market dipped by around 50%, eventually taking the total capitalization from its all-time high of $2.5 trillion to around $1.7 trillion.\u00a0 As was expected,&#8230;<\/p>\n","protected":false},"author":1,"featured_media":276158,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDYvYjY5MTBiNjEtYzBlNC00MjJkLTlmYjctMDE3NjA4YTY3Nzg5LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,74937,117,73711],"class_list":["post-276157","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-bitcoin-price","tag-business","tag-investments"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/276157","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=276157"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/276157\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/276158"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=276157"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=276157"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=276157"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}