- Michael Saylor said his company had anticipated potential bitcoin volatility and is prepared to “HODL through adversity”.
- MicroStrategy took a $205 million bitcoin-backed loan from Silvergate Bank in March 2022, and if bitcoin falls below $21,000, the margin is said to be at risk.
- Sailor previously tweeted that the company has 115,109 BTC as well as other assets available to post as collateral to avoid liquidation.
Microstrategy, a software analytics company and the largest corporate holder of bitcoin, dominated the news on Tuesday due to the risk of getting margin in its $205 million bitcoin-backed loan.
The company’s risk became apparent as bitcoin fell below the $21,000 debt margin call figure overnight. However, its CEO took to Twitter to reassure investors that the company is in a good position not to sell its bitcoin.
“When MicroStrategy adopted the #Bitcoin strategy, it anticipated volatility and structured its balance sheet so that it could continue to #HODL under adverse conditions,” Saylor Told,
Sailor quote-tweeted an earlier announcement dated May 10 that detailed the company’s plan along with the terms of the loan.
“MicroStrategy has a term loan of $205M and needs to maintain $410M as collateral. $mstr [MicroStrategy] There is 115,109 BTC that it can pledge,” Sailer explained. “If the #BTC price drops below $3,562, the company may post some other collateral.”
The Silvergate Bank loan required $410 million worth of collateral, which the company would deplete if the price of bitcoin falls below $21,000 – requiring the microstrategy to add additional collateral to maintain the terms of the loan. Is.
As explained by Saylor, MicroStrategy has enough bitcoin to hold as collateral to fund the loan all the way up to a BTC value of $3,562. If bitcoin falls below that price point, the company intends to collateralize it with other assets.