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MicroStrategy to raise another $600 million to plow into bitcoin as the cryptocurrency crosses $50,000 threshold

Business Insider logo Business Insider 2/16/2021 mfox@businessinsider.com (Matthew Fox)
Alejandro Balbis sitting in front of a computer: Traders work on the floor of the New York Stock Exchange (NYSE) on March 16, 2020 in New York City Spencer Platt/Getty Images © Spencer Platt/Getty Images Traders work on the floor of the New York Stock Exchange (NYSE) on March 16, 2020 in New York City Spencer Platt/Getty Images

MicroStrategy is continuing it bitcoin buying binge as the price of the cryptocurrency recently crossed the $50,000 level.

In a press release on Tuesday, the software technology company said it plans to raise an additional $600 million from convertible senior notes, of which all the proceeds will be used to buy more bitcoin.

MicroStrategy is the first corporation to directly purchase bitcoin, as its CEO, Michael Saylor, sought to hedge against a potential devaluation in the US dollar. Since the company's first purchase of bitcoin in August, MicroStrategy now owns 70,784 bitcoin, worth more than $3.5 billion on Tuesday.

More corporations have followed the footsteps of MicroStrategy and directly purchased bitcoin on their balance sheet, including Square, and more recently, Tesla.

The electric vehicle manufacturer acquired $1.5 billion in bitcoin in January and said it plans to begin accepting the cryptocurrency as a form of payment for its products.

This isn't the first time MicroStrategy has raised money for the sole purpose of buying more bitcoin. In December, the firm raised $400 million to add to its bitcoin holdings.

MicroStrategy has paid an average of $16,035 per bitcoin, and the move has paid off. Shares of MicroStrategy have soared 736% since the stock became a de-facto bitcoin ETF with its first purchase in August. The company's market valuation has exploded from less than $2 billion in August to more than $10 billion today.

The bet has also made CEO Michael Saylor a billionaire based on his 2.4 million share stake in the company.

Shares of MicroStrategy traded up as much as 5% in Tuesday morning trades.

Read more: A Ruffer portfolio manager invested a portion of his $4.8 billion fund in Bitcoin. Here's what swayed him to bet on crypto - and the 2 other ways he's hedging against worrying speculative bubbles

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