MicroStrategy’s bank account now holds 129,218 Bitcoins. In fact, some believe the firm may be obliged to liquidate or pledge a significant portion of its Bitcoin reserves as collateral as a result of Bitcoin’s price fall.
Microstrategy’s CEO Michael Saylor claimed on Tuesday that the company does not expect to get a margin call. He added that they have sufficient collateral if they are required to post additional collateral. The next day, however, reports surfaced that his company would have to sell its Bitcoin to make a margin call on a $205 million Bitcoin-backed loan from Silvergate Capital.
MicroStrategy says it is all rumours
During a webcast in May, MicroStrategy President Phong Le had predicted that if the price of Bitcoin fell below $21,000, it would prompt a “margin call” or a demand for additional capital.
On Tuesday, Bitcoin dipped below that mark, hitting $20,816.36 before stabilizing near $22,000. The company soon claimed it had not received a margin call in an email.
Michael Saylor, however, dispelled rumours that his firm is on the verge of needing to liquidate its Bitcoin to fulfill a margin call on a Bitcoin-backed loan. As the price of BTC continued to fall after the weekend sell-off, the rumour grew louder. Saylor tweeted Tuesday,
“When Microstrategy adopted a Bitcoin strategy, it anticipated volatility and structured its balance sheet so that it could continue to hodl through adversity.”
Furthermore, according to Saylor, Microstrategy’s 115,109 Bitcoins can pay the $410 million collateral down to the BTC price of $3,562. According to the CEO, if the price of Bitcoin drops even further, Microstrategy has other assets it can use as collateral.
The firm “has to keep $410 million as collateral” for the Silvergate Capital loan, according to a tweet from Saylor on May. Microstrategy presently has 115,109 BTCs
