Microstrategy Debunks Margin Call Rumor — Says Bitcoin Liquidation Unnecessary Even if BTC Falls Below $3,562 – Featured Bitcoin News

Microstrategy, a Nasdaq listed software company has dispelled the notion that it is being sued for bitcoin-backed loans. He will have to sell coins. If the price of the cryptocurrency “falls below $3,562 the company could post some other collateral,” the executive explained.

Microstrategy Hasn’t Received a Margin Call

Microstrategy CEO Michael Saylor dispelled the notion that his company may have to liquidate bitcoin in order to pay a margin demand for a loan backed by bitcoin. This rumor only grew as BTC prices continued their slide after this weekend’s sale-off.

Saylor, however, tweeted Tuesday:

Microstrategy used a Bitcoin strategy to anticipate volatility, and it structured its balance sheet in a way that would allow it to weather any 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 revealed in a May 10 tweet that Microstrategy “needs to maintain $410 million as collateral” for this loan.

Microstrategy has 115.109 BTC at the moment. Macrostrategy is also holding 14109 BTC. This brings the total of its subsidiaries to 129 218 bitcoins.

The rumor started circulating when Microstrategy’s president, Phong Le, said in May that if the price of bitcoin dropped below about $21K, it would trigger a “margin call.” Typically, a margin call could be met by the company providing more capital or liquidating the loan’s collateral.

This week, bitcoin’s price fell below $21K. Microstrategy said Tuesday to Reuters that it had not been given a margin call.

You can contribute more bitcoins to keep the ratio of loan-to value at the desired level.

Furthermore, Saylor explained that Microstrategy’s 115,109 bitcoins can cover the $410 million collateral down to the BTC price of $3,562. Microstrategy could also post collateral as collateral in the event that the cryptocurrency price falls even further. The executive elaborated:

Microstrategy holds 115.109 BTC it is able to pledge. Microstrategy could offer collateral to cover the cost of BTC if it falls below $3562.

Let us know your thoughts on the Microstrategy margin calling rumor. Comment below to let us know your thoughts about the Microstrategy margin call rumor.

Kevin Helms

Kevin is a graduate of Austrian Economics. He discovered Bitcoin in 2011, and has been an advocate ever since. His main interests are in Bitcoin security, open source systems, network effects, cryptography, and intersections between economics, cryptography, and Cryptography.