FDIC-insured bank closes Bitcoin-collateralized $205 million loan to buy more Bitcoin

3 months ago
2 mins read

MacroStrategy LLC, a subsidiary of MicroStrategy Incorporated (MSTR) has recently loaned $205 million with collateral in Bitcoin (BTC), allowing it to purchase even more of the digital asset.

The loan to the largest independent publicly-traded analytics and business intelligence company has been provided by Silvergate Bank, a subsidiary of the crypto-focused Silvergate Capital Corporation, MicroStrategy stated in a press release on March 29.

Holding the largest part of MicroStrategy’s Bitcoin supply, the recently formed MacroStrategy plans to use the proceeds from this interest-only term loan to grow that supply by additional Bitcoin.

Under the loan terms, the company will use the proceeds to purchase Bitcoin, pay fees, interest, and expenses involved in the loan transaction, or for MacroStrategy’s or MicroStrategy’s general corporate purposes.

Silvergate’s Bitcoin-collateralized loan product

The loan was carried out through SEN Leverage, Silvergate’s lending product that provides institutional clients with secure access to capital through US dollar loans with leverage collateralized by Bitcoin.

According to MicroStrategy’s CEO Michael Saylor:

“The SEN Leverage loan gives us an opportunity to further our position as the leading public company investor in bitcoin. Using the capital from the loan, we’ve effectively turned our Bitcoin into productive collateral, which allows us to further execute against our business strategy.”

Silvergate’s CEO Alan Lane also commented on the loan, stating that:

“We’re thrilled to add MicroStrategy to our growing list of SEN Leverage borrowers. Their innovative approach to treasury management is an exceptional example of how institutions can utilize their bitcoin to support and grow their business.”

The bank is regulated and supervised by the California Department of Financial Protection and Innovation, as well as the Federal Reserve. Its deposits are insured by FDIC, the US Federal Deposit Insurance Corporation.

While the cryptocurrency industry grows, so does the need for access to capital, provided by banks such as Silvergate through lending products like SEN Leverage. 

As reported by Finbold, crypto has recently hit $2 trillion in market capitalization and continues to grow, thanks to the bullish gains by major cryptocurrencies like BTC and Ethereum (ETH).

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Ana Nicenko

Ana Nicenko has a plethora of knowledge and experience as a journalist covering the cryptocurrency and blockchain industries, having written for a variety of projects and organizations. Additionally, Ana has a master's degree in English Language and Literature. At Finbold, she reports news on the digital assets sector.