NEW YORK: Major bitcoin corporate backer MicroStrategy will borrow US$600 million to buy more of the currency, it said on Tuesday, as the cryptocurrency surged past US$50,000 in a rally fuelled by wider acceptance among investors.
The company, whose Chief Executive Michael Saylor is one of the most vocal proponents of bitcoin, spent last year steadily amassing more of the currency after making its first investment in August as it soared in value.
Bitcoin received its most recent boost when Elon Musk's Tesla bought US$1.5 billion of the currency earlier this month. It has also attracted endorsements from business people and celebrities, who have bet it will become an alternative to central-bank issued currencies.
Shares of MicroStrategy, the world's largest publicly traded business intelligence company, rose more than 4 per cent on the news, adding to their meteoric 580 per cent surge in the past year. Bitcoin, which was worth around US$7,200 at the start of last year, rose more than 5 per cent to briefly break past the US$50,000 mark.
The company already owns close to 72,000 bitcoin, a regulatory filing showed on Feb 2, valuing its bitcoin holdings at about US$3.6 billion, according to a Reuters calculation.
Many cryptocurrencies have struggled to win the trust of mainstream investors and the general public due to their speculative nature and potential for money laundering.
However, major firms such as BNY Mellon, asset manager BlackRock, credit card giant Mastercard and payments companies Square and PayPal, have backed certain cryptocurrencies in recent weeks.
MicroStrategy bought nearly 25,000 bitcoin for US$250 million in August last year, the company's foray into the cryptocurrency. Saylor at the time called bitcoin an attractive investment asset, with more long-term appreciation potential than cash.
MicroStrategy said last week that it views its bitcoin coffers as long-term holdings and does not plan to regularly trade in the currency or to hedge or enter into derivative contracts.
The company said it plans to issue US$600 million in convertible notes to fund its bitcoin purchase, after issuing US$650 million in notes in December as well to buy the currency.