Microstrategy Debunks Margin call Rumor — Says Bitcoin Liquidation Inessential Albeit BTC Falls Below $3,562
Jun 16, 2022 10:44 UTC
Jun 16, 2022 at 10:44 UTC
The CEO of the Nasdaq-listed computer code company Microstrategy has debunked the rumor that his company is facing a call for a bitcoin-backed loan and can be forced to sell some coins. If the value of the cryptocurrency “falls below $3,562 the company could post another collateral,” the manager explained.
Microstrategy Hasn’t Received a Margin call
Microstrategy CEO Michael Saylor debunked the rumor that his company is about to have to liquidate its bitcoin to fulfill a call for a bitcoin-backed loan. The rumor is intense because the value of BTC continued to plummet once the weekend sell-off.
However, Saylor tweeted Tuesday:
When Microstrategy adopted a bitcoin strategy, it anticipated volatility and structured its Balance Sheet so it might still hold through adversity.
Microstrategy’s Q1 2022 presentation details that the company took out a three-year term loan of $205 million from Silvergate Bank against 19,466 bitcoins.
Saylor discloed in an May 20 tweet that Microstrategy “needs to take care of $410 million as collateral” for this loan.
Microstrategy is presently holding 115,109 BTC. Additionally, its subsidiary, Macrostrategy, is holding 14,109 BTC, delivering its cluster total to 129,218 bitcoins.
The rumor started once Microstrategy’s president, Phong Le, affirmed that if the value of bitcoin born below concerning $21K, it might trigger a “margin decision.” Usually, a call may well be met by the Company providing a lot of capital or liquidating the loan’s collateral.
The price of bitcoin unfit below the $21K level on. However, Microstrategy told Reuters Tuesday that it’s not received a call, emphasizing:
We can invariably contribute extra bitcoins to take care of the specified loan-to-value magnitude relation.
Furthermore, Saylor explained that Microstrategy’s 115,109 bitcoins will cowl the $410 million collateral right down to the BTC value of $3,562. However, if the value of the crypto were to fall even lower, Microstrategy has alternative assets it might post as collateral, the manager elaborated, elaborating:
Microstrategy has 115,109 BTC that it will pledge. If the value of BTC falls below $3,562 the company could post another collateral.