MicroStrategy CEO Michael Saylor has clarified that the company’s strategy allows it to hold bitcoin (BTC) through volatile times, easing market concerns the firm is facing margin calls on its bitcoin-backed loans. Was falling
The comments come as the US software firm confirmed it has yet to receive a margin call on the $205 million it borrowed from crypto-focused bank Silvergate Capital in March. The three-year loan has been reconciled by about 20,000 bitcoins.
“When Microstrategy adopted the bitcoin strategy, it anticipated volatility and structured its balance sheet so that it could continue to HODL under adverse conditions,” Sailor said in a statement. Tweet, “Hodl” is a popular term used by crypto investors who refuse to sell regardless of price action.
CFO says no margin call yet
In May, Microstrategy’s chief financial officer Fong Le said that the company may have to post more collateral or sell some of its bitcoin in the event of a margin call, prompted by a drop in the price of BTC to less than $21,000. .
Bitcoin fell below that range on Tuesday, dropping to around $20,800 before rising above $22,000. According to CoinGecko, at the time of writing, it is down by 3.2% in the past 24 hours to $21,160.
Dismissing margin call speculation, Michael Sayer said that would not happen as long as the loan-to-value ratio remains below 50%. He sharp In a previous tweet, which suggested that a margin call could only happen if the BTC price drops below $3,562.
If this happens, Microstrategy, which holds 129,218 bitcoins, will provide “some other collateral” to prevent the liquidation, he said. a separate but not unrelated Reuters In the report, the company is quoted as saying that it had not received a margin call on its $205 million Silvergate bank loan. It said:
“We can always contribute additional bitcoin to maintain the required loan-to-value ratio. Even at current prices, we will retain more than enough additional collateralized bitcoin to meet our needs under the loan agreement. continue.”
MicroStrategy’s CEO criticized
bitcoin critic peter schiff destroyed Seller on Microstrategy’s bitcoin investment.
“Volatility is one thing. It’s a collapse,” said the gold bug, in response to Michael Saylor’s tweet about suffering “adversity.”
“Did you anticipate something like this? If so, why buy so much bitcoin in the first place? Why encourage others to take out a loan to buy bitcoin if you anticipate such a price drop? Bought more during,” he quipped rhetorically.
Earlier, Jim Cramer of Mad Money took potshots at Sailor after bitcoin fell to a new 18-month low on Monday. He joked: “As Bitcoin falls, keep in mind that Microstrategy’s “tactics” are worth watching.”
Shares of MicroStrategy rose more than 3% to $156 on Wednesday morning after a steep drop the previous day.