Strategy Plans to Raise $21 Billion for Bitcoin

Strategy, formerly known as MicroStrategy, has announced a groundbreaking development that it wants to raise up to $21 billion to buy even more Bitcoin (BTC). The company plans to raise this massive amount through the issuance of preferred shares.

$21 Billion for Bitcoin

Strategy has entered into a sales agreement that allows them to issue 8% Series A perpetual strike preferred shares at a nominal value of $0.001 per share, according to a press release. The total proceeds from this issuance could amount to $21 billion.

In addition, the company emphasizes that these share sales will take place in a structured manner over an extended period. This will take into account the trading price and trading volumes of the preferred shares at the time of sale. Strategy announced that the net proceeds will be used for general corporate purposes, including the purchase of Bitcoin and working capital.

This news comes just a week after the company announced that it did not buy any Bitcoin last week, which deviates from their usual strategy. Since the beginning of this year, Strategy has been buying Bitcoin every week. At present, Strategy owns 499,096 BTC, which it purchased for a total of $33.1 billion, at an average price of $66,357 per BTC.

The decision to raise additional funds now seems to be driven by the desire to buy more during the current dip. Crypto whales have meanwhile taken advantage of the price drop to accumulate more BTC, according to analyst Ali Martinez. Over the past 72 hours, these whales would have bought more than 22,000 BTC.

Price Impact by Announcement

The price of Bitcoin briefly rose to $84,000 after the announcement, but Strategy’s share price (MSTR) reacted less positively and fell by more than 5% in pre-market trading. Over the past month, the share price has even fallen by 14%, making investors cautious.

Strategy’s announcement provides a bullish outlook for Bitcoin, but the impact on the market price is likely limited. This is because the company usually makes its purchases over-the-counter (OTC), so the buying pressure is not directly visible in the market.

Despite recent price drops, Strategy continues to stick to its vision that Bitcoin is a valuable long-term investment. The market is now waiting to see whether this bold plan will bear fruit or whether the ongoing volatility will throw a spanner in the works.