Bitcoin soars after MicroStrategy’s $500M investment announcement

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The bitcoin price has had a good weekend. In the past two days, the value has increased by about 200 USD to 21,500 USD and just before that, it was announced that MicroStrategy wants to invest 500 million euros in bitcoin.

Good weekend for bitcoin price

If bitcoin drops below 20,000, is it time to panic or just a good buying moment? That depends on who you ask. The fact remains that last week the price even dropped to 18,900 USD , but now has risen to 21,500 USD.

Bitcoin soars after MicroStrategy's $500M investment announcement

The rise began on September 9, a day after it was announced that MicroStrategy wants to sell shares to get more buy bitcoin. The tech company has struck a $500 million (โ‚ฌ492 million) deal with investment funds Cowen and Company and BTIG.

MicroStrategy wants more bitcoin

In late June, MicroStrategy announced that they have about 129,699 bitcoins, for this they paid almost $4 billion. According to a prospectus sent to the Security and Exchange Commission (SEC), the company wants to raise $500 million to buy even more bitcoin.

MicroStrategy is mindful of the recent price fluctuations that made bitcoin worth less than 20,000 euros for a while. They have their own plans for dealing with the volatility

MicroStrategy’s prospectus reads:

“Future fluctuations in the trading prices of Bitcoin may cause us to convert Bitcoin purchased with the net proceeds of this offering into cash with a value significantly less than the net proceeds of this offering.”

In other words, if they are forced to sell, it could be below the price they bought bitcoin at. The prospectus goes on to say that the company is not considering using its bitcoin for trading or derivatives contracts. It just wants to buy and hold.

MicroStrategy writes that they do not have a specific amount of bitcoin in mind. They are guided by the market “in determining whether to take on debt or equity financing to buy additional bitcoin.”

Morgan Stanley stands by MicroStrategy

Investment firm Morgan Stanley has a small number of MicroStrategy shares, with the Morgan Stanley Insight Fund holding up to 41,508 and the Morgan Stanley Institutional Fund Trust holding 25,469.

The home price of MSTR, MicroStrategy’s stock is currently $239.59 and has risen 12.53% in the past 24 hours. Below is the share price of MSTR.

Bitcoin soars after MicroStrategy's $500M investment announcement
Source: Tradingview

Morgan Stanley has also purchased up to EUR 9,555,014 of MicroStrategy bonds with a coupon of 6.125%, maturing on June 15, 2028. The value of these MSTR bonds has decreased from the purchase amount and is currently valued at a total of 8,265,526 euros.

In addition to MicroStrategy’s operating results, Morgan Stanley also appears to be backing the tech company’s bitcoin strategy. The investment firm has made several positive statements about bitcoin and crypto in recent years.

Some Morgan Stanley asset managers seem to believe that bitcoin and crypto are here to stay, describing digital currencies as “a likely permanent investment category” and “a viable asset class” with potential growth.

In June of last year argued Morgan Stanley that bitcoin and cryptocurrencies are traded as speculative assets, but did not rule out the possibility that crypto could become conventional currency in the future.

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