- The decision is influenced by concerns over a new tax policy targeting unrealized capital gains.
- Recently, the company made its largest purchase of the year by acquiring 11,000 BTC on January 21.
MicroStrategy, the world’s largest corporate Bitcoin holder, announced the redemption of $1.05 billion in convertible senior notes due in 2027. This decision comes amid growing discussions about taxing unrealized capital gains, a proposal that could significantly impact Bitcoin-heavy companies like MicroStrategy.
In the announcement, MicroStrategy informed noteholders they have until February 24 to redeem their securities at 100% of the principal value or convert their holdings into Class A MicroStrategy shares at approximately $142 per share.
This decision reportedly aligns with broader concerns surrounding the Corporate Alternative Minimum Tax (CAMT), part of the Inflation Reduction Act of 2022, which may tax $19 billion in unrealized capital gains.
“As a result of the delivery of the Notice, at any time prior to 5:00 p.m., New York City time, on February 20, 2025, the Notes are convertible, at the option of the holders of the Notes, at the applicable conversion rate of 7.0234 shares of MicroStrategy’s class A common stock per $1,000 principal amount (reflecting a conversion price of $142.38 per share)”, the company wrote.
See Related: MicroStrategy Aims For $786 Million In Bitcoin Investment With Convertible Notes
Taxation Debate
Digital assets, particularly volatile cryptocurrencies like Bitcoin, face unique risks under unrealized capital gains taxation. Critics argue this approach discourages investment and could create financial instability for firms like MicroStrategy, which heavily rely on Bitcoin as a treasury strategy.
MicroStrategy’s Bitcoin holdings reached a staggering 461,000 BTC this January, valued at around $49 billion. With an impressive 65% gain on its investment, the company remains the largest corporate Bitcoin holder globally. According to Michael Saylor’s Portfolio Tracker, the company’s most recent purchase on January 21 added 11,000 BTC, marking 2025’s largest single acquisition.
MicroStrategy’s debt buyback announcement coincides with ongoing debates around unrealized capital gains taxation. The company, alongside Coinbase, recently addressed the U.S. Internal Revenue Service (IRS) in a joint letter, highlighting the unintended consequences of CAMT, Cointelegraph reported.
