The company said it would save all potential future income to buy more Bitcoin
The largest Bitcoin buying firm, MicroStrategy, has filed a request with the United States Securities and Exchange Commission to sell up to $500 million worth of stock. The funds earned could be used to buy more Bitcoin.
According to a filing by the enterprise software giant on Friday, the company said it would save all potential future revenue to buy more Bitcoin and grow its software business. However, no specific date was given for possible share sales.
With funds raised through stock and bond offerings, MicroStrategy has purchased over 130,000 Bitcoin worth over $2 billion since 2020.
As reported by U.Today, MicroStrategy bought 480 Bitcoins in June for nearly $10,000,000. To buy more Bitcoin, MicroStrategy borrowed $205 million in March from cryptocurrency specialist bank Silvergate over three years, using its Bitcoin holdings as collateral.
A few months ago, the aggressive bitcoin investor responded to concerns about a possible liquidation by stating that he had not received any margin calls on the $205 million bitcoin-backed loan. A margin call is a circumstance where an investor is required to contribute additional funds to avoid losses on a trade made with borrowed money.
According to Michael Saylor, now president of MicroStrategy, “The margin call is much ado about nothing,” as he says the company was “10x overcollateralized” on its Bitcoin-backed loan. He claims that the price of Bitcoin should fall below $3,500 before further collateral is needed.
Will this have an impact on the price of BTC?
Every market cycle has an accumulation phase, during which prices flatten out and contrarian investors seize the opportunity to buy low.
Interestingly, MicroStrategy’s purchase of BTC in June follows Bitcoin’s decline to a low of $17,566.
Bitcoin funds often take time to form because the volume of buyers and sellers must balance out until demand exceeds supply, and these extended periods are called “accumulation”.
Bitcoin price action continues to be weighed down by current macro factors, making it difficult to predict a bottom. At press time, BTC was changing hands at $21,334, up 3.38% in the past 24 hours.