The 19’000’000th bitcoin was mined yesterday. A round number is a good wake-up call for those who haven’t yet gotten some: Bitcoin is scarce, and there’s only 2’000’000 of it left to mine.
The competition for Bitcoin ownership is even more dire now that there are people who just can’t get enough of it. Michael Saylor is definitely one of them.
His software company MicroStrategy started hoarding Bitcoin in 2020, launching the trend of public companies buying Bitcoin for their treasury. Since then Microstrategy’s Bitcoin possessions have risen to an impressive 125K BTC, purchased at an average price of $30k per #BTC and worth approximately $6Bn now, which makes MicroStrategy itself a partly leveraged Bitcoin holdings company.
However, a company’s cash flow has its limits… but that doesn’t seem to stop Michael Saylor from continuing Bitcoin hoarding.
🤑 This week he announced that MacroStrategy, a Bitcoin-specific MicroStrategy subsidiary, closed a $205M Bitcoin-collaterized loan from the Silvergate Bank… to purchase more Bitcoin. An elegant solution allowing to move forward using the existing treasury.
Borrowing against existing Bitcoin holdings is not a new idea, and one of the most famous projects is El Salvador’s “volcano bond”: a $1Bn Bitcoin-backed bond, half of the proceeds of which would go to financing the “Bitcoin City”, and the other half – to buy Bitcoin.
However, in his recent interview to Bloomberg, Saylor called this bond a “hybrid sovereign debt instrument, which has its own credit risk” and expressed an opinion that the world might not yet be ready for it just now. El Salvador itself has postponed the issuance due to the tense geopolitical situation, but has not renounced it.
💰 There are many ways of leveraging Bitcoin possessions: leverage it in the DeFi, loan it out, issue Bitcoin-backed bonds or simply use it as a collateral to borrow money. What’s clear is that Bitcoin has become an integral part of the world finance, and people and companies ignoring it are risking to miss out on the future.