Saylor Eyes $30 Billion in Digital Credit to Fund Bitcoin Buys
MicroStrategy, the prominent Bitcoin treasury company, is exploring a strategy to generate up to $30 billion in digital credit, a move that could significantly bolster its Bitcoin holdings without resorting to new common-stock fundraising or relying on further price appreciation of the cryptocurrency. The company plans to finance additional Bitcoin purchases through preferred-share offerings.
During MicroStrategy’s third-quarter earnings call, Executive Chairman Michael Saylor articulated the company’s capacity to create this substantial amount of digital credit, leveraging its existing balance sheet. “We could create $10 billion, $20 billion, $30 billion of digital credit,” Saylor stated, emphasizing that this could be achieved without additional common-stock capital raises or further Bitcoin price gains.
This potential financing avenue underscores a strategic shift for the company, which is increasingly looking towards preferred shares, such as its STRC offering, to fund its Bitcoin accumulation efforts. This approach marks a departure from its previous primary reliance on convertible debt or common-share sales.
CEO Phong Le confirmed this strategic pivot during the call, identifying the issuance of digital credit as the principal method for acquiring more Bitcoin. “The primary way to acquire Bitcoin is by issuing digital credit,” Le explained. He further elaborated that if MicroStrategy were to raise between $1 billion and $2 billion in a month through STRC, a portion of those proceeds could be allocated to dollar reserves, with the remainder used to purchase Bitcoin.
The company’s third-quarter financial report revealed a net income of $19.53 billion, largely propelled by a $20.91 billion increase in the valuation of its digital assets. As of October 25, MicroStrategy’s Bitcoin holdings stood at 848,517 BTC, representing a 26% year-to-date increase.
It is important to note that the $30 billion figure represents a potential capacity for digital credit creation, not a formally announced fundraising target.
