Top Banks Line Up to Finance MicroStrategy's Bitcoin Buying Spree, as Michael Saylor's Strategy Prevails

Despite persisting debates about the sustainability of MicroStrategy's (now Strategy) Bitcoin treasury... strategy, demand for the debt instruments fueling the firm's digital asset purchases shows no signs of slowing as investors seek high beta exposure to the asset.

Prominent banks are showing increasing interest in facilitating capital raises by firms like MicroStrategy (now Strategy) to help fuel the company's Bitcoin purchases. In the latest development, at least four top banks are set to underwrite Strategy's latest convertible note offering, which will pave the way for the firm to ramp up its digital asset acquisitions.

On Tuesday, February 18, Strategy announced its intention to raise another $2 billion through senior convertible notes, boasting a 0% interest rate, for general corporate purposes, including facilitating further Bitcoin purchases. 

Prominent banks like Morgan Stanley, Barclays, Citigroup, and Goldman Sachs will handle this new sale, as noted by VanEck Head of Digital Asset Research Matthew Sigel.

These banks' participation, especially given their stature in the financial world, could instill greater confidence among investors, ultimately boosting Strategy's goals.

Lucrative Fees, a Driving Force

The escalating desire to participate in Strategy's capital raises could be attributed to sustained demand, with these banks likely eyeing the lucrative underwriting fees.

A recent example is the successful offering of the firm's perpetual preferred stock, Strike Preferred Stock (STRK), which offers investors long-term dividend payments. According to the company, the offering exceeded expectations, raising over $560 million, which is roughly three times the projected target. 

At the same time, analysts continue to highlight that demand for the instrument is growing even after the capital raise, as its price surged over 23% from $80 to about $98.60 at the time of writing — making it the best performing and most liquid perpetual security to be listed in the U.S. since 2022.

With up to 2% of sale proceeds paid to underwriters, Strategy's $560 million STRK offering would translate into a $11.2 million fee pool for banks.

Hence, with the planned $2 billion offering, banks stand to gain even more, as it will translate to an estimated $40 million fee pool.

Michael Saylor’s Victory?

Factoring in these lucrative fees, the continued demand, and the improving crypto regulatory environment, we could see more banks eager to facilitate Strategy's capital raises. 

One market pundit has tipped this likely trend as evidence of the success of the firm's Bitcoin strategy.

“The beginning of the financialization of Bitcoin is settled; Michael Saylor won,” Arch Public co-founder Andrew Parish, better known as “AP Abacus” on X, asserted in a recent post.

suggesting that banks are actively seeking out the next dozen firms that will/could replicate what Strategy has done in the Bitcoin capital markets.

Strategy holds 478,740 BTC, valued at nearly $46 billion, after failing to announce new purchases last week, which have been a nearly weekly occurrence. The firm set out to raise $42 billion to buy the asset through 2027. This year alone, the company has already purchased 31,270 BTC at an aggregate price of $3.17 billion.

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