Software firm MicroStrategy has cemented its position as a major Bitcoin player with its numerous large purchases. The company which is valued at $1 billion had put a significant portion of its own funds into buying BTC but the majority of the money used to purchase all of the bitcoin had been from loans. These loans which include convertible notes, senior secured loans, and bitcoin-backed loans account for $2.4 billion of its $3.97 billion BTC purchases. How The Loans Look MicroStrategy had used convertible notes to fund a good portion of its bitcoin holdings. These notes are converted into stock of the company when they mature. So basically, they are a payment towards future stock ownership of the software company. The convertible notes make up $1.75 billion which are pegged at a 0% to 0.75% interest rate. Making up by far the largest part of the loans MicroStrategy has taken out to buy bitcoin. The other loans are much lesser compared to the convertible notes. An example is the senior secure loans. Data shows that MicroStrategy had only taken $500 million in these senior secured loans to purchase bitcoin. These, however, carry a higher interest rate at 6.1%. Related Reading | Bullish: Bitcoin Marks First Green Weekly Close After Two Months In The Red Lastly, MicroStrategy had also secured bitcoin-backed loans. These loans were first-of-its-kind loans when they were taken out by the software company. The $205 million wa...
