Strategy raises $500M for Bitcoin purchases

Strategy (formerly MicroStrategy) has announced the issuance of 5 million Class A preferred shares at a price of $100 per share. The raised funds will be used for corporate purposes, including the acquisition of Bitcoin.

These shares will provide investors with fixed dividends of 10% annually, paid out quarterly in cash. The company also retains the right to buy back part or all of the issued shares in the future.

Another Addition to the Bitcoin Reserve

The capital-raising announcement came shortly after Strategy acquired 130 BTC for $10.7 million. This purchase was the company’s smallest since launching its Bitcoin accumulation strategy in August 2020.

Following this latest transaction, Strategy's total Bitcoin holdings reached 499,226 BTC. This sparked discussions within the crypto community.

Criticism from Entrepreneurs

Renowned internet investor Jason Calacanis accused Strategy founder Michael Saylor of "hijacking" Bitcoin. He argued that a few large players accumulating significant amounts of digital gold could undermine the narrative of Bitcoin’s decentralization.

However, Anthony Pompliano, CEO of Professional Capital Management, strongly disagreed. He emphasized that Strategy is a publicly traded company with thousands of shareholders, which also applies to its Bitcoin reserves.

Risks and Possible Consequences

Strategy’s plans were also commented on by economist and BnkToTheFuture founder Simon Dixon. He expressed doubts about the sustainability of the 10% fixed dividend scheme. According to him, financial difficulties could pose a serious challenge for the company.

Dixon also suggested that in such a scenario, the U.S. government might nationalize Strategy, turning it into part of a national Bitcoin reserve. He called this move a «strategic step.»

Long-Term Goals

Strategy continues its aggressive capital-raising policy through preferred share issuance. In the long run, the company aims to raise $21 billion, solidifying its position as the leading institutional holder of Bitcoin.