MicroStrategy denied rumors that it had received a margin call against a $205 million bitcoin-backed loan from Silvergate Capital, although BTC fell below the company’s $21,000 liquidation price.
- The NASDAQ-listed business intelligence giant began accumulating large chunks of bitcoin about two years ago. Since then, he has bought around 130,000 BTC. Some purchases came from excess cash, while others were executed after convertible note offerings.
- At the end of March, the company made history by taking a $205 million term loan from Sylvgate Bank, which was collateralized by its own BTC holdings. The firm used the money to buy even more bitcoins.
- However, this comes at a time when the cryptocurrency was trading as high as around $50,000. Since then, the asset has lost more than 50% of its value in a matter of months, jeopardizing the microstrategy’s debt and increasing the risk of liquidation.
- Back in May, when BTC had already fallen to around $30,000, the company’s CEO and founder – Michael Sayer – stated that the loan required $410 million of maintenance collateral to remain active (twice the size of the original loan). ).
- Furthermore, he noted that the collateral MicroStrategy held was enough to keep the position safe until the price of BTC fell to $21,062 – something that seemed impossible at the end of March but happened this week.
- A Reuters report dated June 15 cited a company statement refusing to receive margin calls for Silvergate loans “even though bitcoin prices have fluctuated recently.”
“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.”
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