Chasing high and increasing positions! MicroStrategy issued bonds again this month to raise funds for buying coins. Can we expect a long bull market for Bitcoin?

Zhitong App has learned that MicroStrategy (MSTR.US) has announced for the second time in less than two weeks that, as Bitcoin soared to a historic high, it will sell convertible notes to purchase more Bitcoin. According to a statement on Wednesday, the company plans to issue $500 million in 2031 convertible senior unsecured notes. The company purchased $821 million worth of Bitcoin, funded by the sale of $830 million in convertible senior notes due in 2030 that ended on March 8.

MicroStrategy plans to offer the option for initial buyers of the latest series of bonds to purchase an additional $75 million in bonds. The company stated that the proceeds from this sale may vary and could also be used for general corporate purposes.

Chairman and co-founder of MicroStrategy, Michael Saylor, posted on the social media platform X that the company has just "purchased 12,000 Bitcoins at a price close to $822 million using the proceeds from convertible notes and excess cash." With the cryptocurrency continuously hitting new highs, MicroStrategy now holds a total of 205,000 Bitcoins, currently valued at over $15 billion. Bitcoin rose by 2.7% on Wednesday, surpassing $73,400.

MicroStrategy, primarily known as a software development company, but acting as a Bitcoin proxy, saw its stock rise nearly 11% on Wednesday, 7.4% on Tuesday, 4.1% on Monday, and 9.7% last Friday. Since announcing the pricing of the bond issuance on March 6, the stock has risen by 68%, following a 346% surge in 2023, it has surged by 180% this year. In comparison, Bitcoin has risen by about 70% this year.

Saylor stated on Monday that Bitcoin will "eat away at gold." He mentioned that with Bitcoin being included in exchange-traded funds (ETFs), more institutional investors will hold Bitcoin. Additionally, Saylor is optimistic about the upcoming "halving" process next month, which occurs every four years, slowing down the coin's supply and reducing the number of coins sold. Saylor said, "To meet the demand of investors, the price of Bitcoin will have to adjust. That's what will happen next in this asset class."

MicroStrategy announced on Monday that it has completed the issuance of 0.625% convertible bonds due in 2030, with net proceeds of approximately $782 million. In a report that day, analysts at Canaccord Genuity wrote that they believe this is the first bond with a maturity in 2030 and a coupon rate below 1%.MicroStrategy is converting an $800 million bond with such a high premium. Analysts wrote, "Although most of the bitcoins accumulated by the company at the end of last year and the beginning of this year were obtained through equity financing, this time, the company utilized more of its complete capital structure by issuing convertible bonds."

In a press release, MicroStrategy stated that it "used the net proceeds from the sale of the notes to purchase additional bitcoins." Since the beginning of this year, MicroStrategy has acquired nearly 16,000 bitcoins.

The appreciation rate of its stock value far exceeds that of the bitcoins it has purchased. As of Monday, according to Canaccord's analysis, MicroStrategy's stock value has a premium of 86% relative to the bitcoins held. This number has significantly increased in the past three days. Using Canaccord's method, MicroStrategy's stock value premium is now around 99%.

Established in 1989, MicroStrategy's business involves enterprise software and cloud services, but its shareholder value is closely tied to bitcoin ownership. Saylor began purchasing bitcoins in 2020 as a hedge against inflation and an alternative to holding cash. The company announced its plans to invest in bitcoin in mid-2020 and disclosed during its earnings conference call that it would allocate $250 million to "one or more alternative assets" within the next 12 months, which may include bitcoin and other digital currencies. In the first three months of 2024, MicroStrategy has spent over $1 billion on bitcoin, more than half of the total purchase volume from last year. Since Saylor started buying, bitcoin has risen by over 675%.

At that time, MicroStrategy's market value was around $1.1 billion. The company is now valued at $30 billion. Saylor stated, "Which company in the world can borrow $1 billion at less than 1% interest rate and invest in your best ideas? Would you not invest? Compared to a few weeks ago, our shareholders have received more bitcoins per share this week, making it very valuable for them."

In addition, the largest cryptocurrency exchange in the United States, Coinbase Global (COIN.US), also announced on Tuesday its plan to issue $1 billion in convertible senior notes to repay existing debts and for general corporate purposes. Cryptocurrency companies are capitalizing on the rising trend of stock prices in the cryptocurrency bull market to raise funds.

Meanwhile, the market's "bitcoin faith" is reignited, with Wall Street's bullish sentiment growing: the current uptrend is just the beginning. Standard Chartered Bank predicts that bitcoin will reach $100,000 by the end of this year; research firm Fundstrat's target range is $116,000 to $137,000; according to hedge fund SkyBridge's forecast, bitcoin will reach $170,000 by April 2025. Cryptocurrency asset management company 3iQ sets a base target price for bitcoin to reach $110,000 in 2024 and $140,000 the following year.In addition, the company has an even more aggressive forecast, in which Bitcoin is projected to reach $180,000 this year and $450,000 by 2025.