Microstrategy has announced its intention to offer 0 million of convertible senior notes due 2032 in a private offering, subject to market conditions. The company also expects to grant the initial purchasers an option to purchase up to an additional million of the notes within a 13-day period from the issue date. The notes […]
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‘Spraying’ Naira Notes Causes Depreciation, Warns Nigerian Anti-Graft Body
The Economic and Financial Crimes Commission (EFCC) has issued a warning against the practice of spraying naira notes at social events, emphasizing that it diminishes the dignity of the currency. In a recent post on its official X page, the Nigerian anti-graft agency urged residents to respect the naira and avoid ridiculing it. The EFCC […]
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Gold Heats Up, China’s Gold-Backed Bond Move, and the 10-Year Treasury Note’s Ominous Rise
In the turbulent macroeconomic landscape marked by clashes in Ukraine and Israel, and with the Fed’s Jerome Powell alluding to persistent and escalated interest rates, the 10-year Treasury note has soared to 5% — a milestone not seen since 2007. Amid this whirlwind, both gold and silver have enjoyed a surge, paralleling the ascent of the crypto world. In contrast, equities have faced a challenging week, with the Dow Jones plummeting over 200 points just ahead of Friday’s closing bell.
Gold Stands Firm in Macroeconomic Turmoil
On October 20, the quartet of leading stock indices — Dow Jones (DJI), S&P 500 (INX), Nasdaq Composite (IXIC), and the Russell 2000 (RUT) — witnessed declines ranging from 0.8% to 1.5%. Concurrently, just a day earlier, the yield on the benchmark 10-year Treasury bond climbed to a staggering 5%, a peak not touched in 16 years.
By Friday, this 10-year note was coasting along at 4.92%, marking a significant 38.6% rise over the past half-year. Simultaneously, WTI Crude and Brent Crude hover in the range of to per barrel, a significant climb from their per barrel trough at June’s end.
The geopolitical tensions in Ukraine and Israel have kept markets on tenterhooks, and Federal Reserve Chair Jerome Powell took a decisive stance in his Thursday speech, hinting at impending rate hikes. Meanwhile, the crypto world showcased its resilience following the misleading ETF news on October 16, especially given that it had previously faced setbacks due to the conflict between Hamas and Israel just a week earlier.
In recent times, precious metals have certainly made their mark. Gold is on the cusp of the K per ounce threshold, currently trading at approximately ,980 per ounce, marking an 8.5% uptick since the start of the year. Over the past week, gold has appreciated by 2.4% relative to the U.S. dollar, while silver has seen a 2.5% rise.
Nevertheless, on a year-to-date basis, silver has declined by 2.5%, standing at per ounce. Reuters points out that the mounting demand for “safe-haven assets,” driven by concerns of a potential escalation in the Israel-Hamas confrontation, has given gold a boost.
In another development, China’s central bank has shown the nation’s sustained appetite for the precious metal throughout the year. On October 20, 2023, Reuters further unveiled that China has been gleaning insights from Russia on navigating financial sanctions.
In a report addressing escalated China-Taiwan tensions, it was highlighted that Chinese researchers from think tanks have explored the idea of issuing gold-backed bonds as a means to sidestep potential sanctions should China take aggressive action against Taiwan. The article further elaborated:
Reuters could not determine the extent to which the think tanks influence China’s decision-making, but they are known to brief and write reports for leading officials.
Gold has showcased its resilience as a trusted safe-haven asset in recent times, though this doesn’t guarantee its future stability. As it approaches its historic peak of ,074.88 from August 2020, gold bugs are watching with bated breath. However, it’s essential to note that while gold’s performance has been commendable, bitcoin (BTC) and the broader crypto economy have outpaced the gains seen in precious metals.
What do you think about gold’s rise in recent times? Share your thoughts and opinions about this subject in the comments section below.
Bitcoin Mining Firm Argo Blockchain To Raise $57.5M Via Senior Notes Offering
The bitcoin mining firm Argo Blockchain filed a registration statement with the U.S. Securities and Exchange Commission (SEC) for a proposed public offering due November 30, 2026, with an interest rate of 8.75% Senior Notes. The UK-based firm plans to raise a total of .5 million through the Notes sales to the public, offering them in increments of . They intend to use the funds for the construction of Argo’s Texas crypto mining facility, which aims to power 90% of operations through renewable sources and is estimated to cost around billion.
Our mining strategy is to cost-effectively acquire and deploy the most advanced mining technology solutions in North American facilities that utilize predominantly renewable and inexpensive power.
The Company will also use the net proceeds “for general corporate purposes” and “potentially acquisitions of, or investments in, complementary businesses” as they are exploring “strategic initiatives in software and other technologies in the wider cryptocurrency and blockchain sectors.”
In connection with the Offering, Argo has applied to list the Notes on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “ARBKL.” If approved for listing, trading on Nasdaq is expected to commence within 30 business days after the Notes are first issued.
The filing states that Argo Blockchain completed its U.S. Initial public offering of 8,525,000 American Depositary Shares on September priced at ,00 per share, having net proceeds of approximately 4.8 million. Later in the month, they held 1,836 Bitcoin and Bitcoin Equivalent “valued at approximately £58.7 (,5) million based on prices as of such date”, with total revenue of £50.4 (,3) million, which translated into a growth rate of 238% “over £14.9 (.2) million in the nine months ended September 30, 2020”.
Related Reading | Argo Blockchain Secures Million Loan with Galaxy Digital LP
Bitcoin Mining Revenue And Strategy
Argo’s mining revenue rose 32%, a total of ,75 million in October, having mined 167 bitcoin or bitcoin equivalent, compared to 165 in September with revenue of ,59 million. The month’s income was generated at a Bitcoin Mining Margin of roughly 84%. The firm reported a total of 1,646 Bitcoin mined year-to-date and owned 2,128 Bitcoin or Bitcoin equivalent by the end of October. They also announced a mining expansion that comes from adding 220 PH/s to its total capacity, “bringing the Company’s mining capacity to 1.295 EH/s”. Recently, Argo Blockchain announced they are investing in the construction of an 800-megawatt crypto mining facility in Texas that could cost between .5 and billion. It is being built on 320-acre land purchased for .5 million. Questions were raised about Argo’s lack of clarity around the costs of the mining facility, but Argo declared the estimated cost of building and kitting based on “numerous assumptions” and defended the investment.
Our investments in mining facilities are designed to significantly expand our mining capacity and provide us with meaningful control over our mining operations. We are taking these steps as part of a broader strategy to shift our business from contracting for hosting of our mining machines in facilities to owning and operating our facilities.
Related Reading | Bitcoin Mining Vs. The World: BTC Leads Sustainable Energy
Argo Blockchain is listed in NASDAQ Global Market, and its market capitalization is approximately 3 million.
Bitcoin Price Rallying Above ,000 on Tuesday | Source: BTCUSD TradingView
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MicroStrategy Sells $500 Million Notes To Buy Bitcoin
MicroStrategy has successfully sold off 0 million worth of notes (“the notes”) which it announced it was selling on June 8th in a press conference, to buy Bitcoin. The notes were sold to qualified institutional buyers in a private offering in reliance to Rule 144A under the Securities Act of 1933. They were all sold to persons outside of the United States in accordance with Regulation S under the Securities Act.
At the time of offering, MicroStrategy estimated that the net proceeds from the sale of the notes and related guarantees after deducting initial discounts and commissions and estimated offering expense payable by MicroStrategy would be 8 million.
MicroStrategy Confirms Sale Of Notes
In a press release that came out earlier today, MicroStrategy states that the notes and guarantees were all sold to qualified institutional buyers under the Securities Act.
“The notes are fully and unconditionally guaranteed on a senior secured basis, jointly and severally, by MicroStrategy Services Corporation, a wholly owned subsidiary of MicroStrategy, and may be similarly guaranteed by certain subsidiaries of MicroStrategy that may be formed or acquired after the closing of the offering.”
There was massive interest in buying the notes offered by the corporation as the company reportedly received more than .5 billion in orders for the notes worth 0 million.
Related Reading | MicroStrategy Receives Over .5B In Orders For 0M Notes To Fund Bitcoin Purchases
CEO Michael Saylor who has always been bullish on Bitcoin said the plan was to buy more Bitcoin to add to its portfolio which now sits at approximately 92,079 Bitcoins.
The press release also issued a notice;
“This press release shall not constitute an offer to sell or a solicitation of an offer to buy the notes or any other securities, nor shall there be any sale of the notes or the related guarantees in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful under the securities laws of any such state or jurisdiction.”
The company is yet to disclose when it will purchase more Bitcoin.
MicroStrategy Unveils A New Subsidiary
The corporation also announced a new subsidiary, MacroStrategy LLC, which now holds all of the bitcoins the company has purchased thus far. This is assumed to be a play to separate the investment portfolio from the core business of MicroStrategy, which is an enterprise business application software vendor.
Related Reading | Why MicroStrategy Decided To Pay Its Board Of Directors In Bitcoin
MicroStrategy is the largest independent publicly-traded analytics and business intelligence company. Its ticker symbol is MSTR and it is traded publicly on the NASDAQ.
The stock market has reacted positively to this news. Shares of MicroStrategy are up 80% as at the time of this writing. MicroStrategy’s market cap now sits at around .82 billion, a massive jump from .03 billion as at yesterday.
Bitcoin Market Reaction To MicroStrategy
This news follows Paul Tudor Jones announcing that he wants to allocate 5% of his portfolio to Bitcoin. Giving Bitcoin the bump it needed to finally get over the k hump after news of Tesla resuming payments with Bitcoin pushed it closed. Bitcoin price is up 9% today and is currently a little over k.
While this is by no means the bullish rally that investors have been hoping for but it shows that institutional investors are still optimistic about the future of the asset as it begins its climb back from its crash about a month ago.
MicroStrategy currently owns .7 billion worth of Bitcoin according to today’s prices, all of which were bought at an average of ,000 per Bitcoin. This amount is higher than any other publicly-traded company in the world.
Chart from TradingView.com
MicroStrategy Receives Over $1.5B In Orders For $500M Notes To Fund Bitcoin Purchases
MicroStrategy is one of the loudest crypto advocates listed on Wall Street. Now, the Michael Saylor-led company is engaging in one of the first-ever corporate bond sales that specifically earmarks the proceeds for Bitcoin purchases.
MicroStrategy’s Strategy? Buy The Dip
After initially planning to issue 0M of the debt, by the time the deal was launching on Monday, the company saw immense demand. Saylor and team elected to up that amount to 0M with Tuesday’s junk bond sale. These type of bonds generally offer more aggressive yields, while running a higher risk of default. The secured notes where reportedly sold at a yield of 6.125%, according to reports, after earlier pricing discussions around 6.25% and 6.5%. Investment bank Jeffries led the offering.
The news comes after a bevy of Bitcoin purchases throughout this first half of the year. To start the year, MicroStrategy locked in 20,000 BTC with a hefty price tag in excess of B. The company grabbed a few hundred more in recent weeks at around K per coin. After a weekend at Miami’s Bitcoin 2021 Conference, Saylor is ready for more.
To date, the firm owns in excess of 90,000 BTC with an average per coin price just shy of K. Nonetheless, Bitcoin’s second quarter dip is evident; MicroStrategy reported in a filing this week a roughly quarter billion dollar hit in it’s next earnings report from the crypto’s fluctuating price. After issuing convertible bonds in the past to make crypto purchases, Saylor seems to be set on buying the dip with this first-ever corporate bond sale.
Related Reading | There’s Zero Chance Of Bitcoin Being Replaced Says Saylor
Corporate Bonds Garnering Some Attention
This isn’t MicroStrategy’s first “first”. The company was also one of the first to pay their board of directors in Bitcoin, and Saylor was led the firm to be the first to have a modified corporate strategy integrating Bitcoin. Saylor’s hyper-fixation on Bitcoin in particular has drawn a fair share of critics, but all that aside, MicroStrategy’s business intelligence products are still seeing success with substantial Fortune 500 customers in their wheelhouse.
This week’s bond offering is also notable not just for being the first of it’s kind, but also from the response it drew. The company upped their offering to 0M in notes, but received in excess of .5B in orders for the offering – including a large number of hedge funds, according to reports. Despite the recent Bitcoin dip, many major investors still seem to be chomping at the bit. The weeks to come could be particularly telling around their aggressive perspective.
MicroStrategy has come back to earth after yielding substantial attention earlier this year with Bitcoin purchases. | Source: $MSTR-NASDAQ on TradingView.com
Related Reading | Saylor: North American Bitcoin Miners To Form Coalition After Meeting With Elon Musk
Featured image from Pixabay, Charts from TradingView.com
FinCEN Director Notes Improved Oversight of Cryptocurrency Industry
n FinCENs director says increased adoption of reporting guidelines for crypto businesses has led to an uptick in the number of suspicious activity reports filedn
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US SEC Report Notes Trading Suspensions, Actions Against Crypto Firms in 2019
n The U.S. SEC has issued a report on enforcement actions in 2019 that notes a number of cases the regulator initiated against digital asset-related firmsn
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JPMorgan Notes Marginal Improvements to Payment System With Blockchain Technology
n A recent report from JPMorgan purportedly notes the potential for blockchain technology in banking and payments three to five years awayn
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