Micro-strategy exposes margin rumors – says bitcoin liquidation is unnecessary even if BTC falls below $ 3,562 – highlighted Bitcoin news

Micro-strategy exposes margin rumors – says bitcoin liquidation is unnecessary even if BTC falls below $ 3,562 – highlighted Bitcoin news

The CEO of the Nasdaq-listed software company Microstrategy has revealed rumors that his company is facing a call for a margin loan with bitcoin and will be forced to sell some coins. If the price of the cryptocurrency falls below $ 3,562, the company could give some other collateral, “the CEO explained.

Microstrategy did not receive a margin call

Microstrategy CEO Michael Saylor has revealed rumors that his company is close to having to liquidate its bitcoin to meet a margin call for a bitcoin-backed loan. Rumors intensified as the price went BTC continued to fall after the weekend sale.

However, Saylor tweeted on Tuesday:

When Microstrategy adopted the bitcoin strategy, it predicted volatility and structured its balance sheet so that it could continue to cope through adversity.

Microstrategy Q1 2022 presentation details are that the company took out a three-year $ 205 million loan from Silvergate Bank against 19,466 bitcoins.

Saylor revealed in a May 10 tweet that Microstrategy “should keep $ 410 million as collateral” for this loan.

Micro-strategy exposes margin rumors – says bitcoin liquidation is unnecessary even if BTC falls below $ 3,562 – highlighted Bitcoin news
Microstrategy’s bitcoin stock in the first quarter of 2022. Source: Microstrategy

Microstrategy currently holds 115,109 BTC. In addition, its subsidiary, Macrostrategy, holds 14,109 BTCbringing their own group total 129,218 bitcoins.

Rumors began circulating when Microstrategy President Phong Le said in May that if the price of bitcoin fell below about $ 21,000, it would trigger a “margin call”. Typically, a margin call can be met by the company providing more capital or liquidating loan collateral.

The price of bitcoin fell below the level of 21 thousand dollars this week. However, Microstrategy told Reuters on Tuesday that it had not received a margin call, noting:

We can always contribute extra bitcoins to maintain the required credit-to-value ratio.

Furthermore, Saylor explained that Microstrategy’s 115,109 bitcoins could cover $ 410 million in collateral by BTC price $ 3,562. However, if the price of cryptocurrencies fell even lower, Microstrategy has other assets that it could put as collateral, the executive explained in detail, elaborating:

Microstrategy has 115,109 BTC that it can be pledged. If the price BTC falls below $ 3,562, the company could give some other collateral.

Labels in this story

bitcoin collateral, Bitcoin loans, bitcoin stock, macrostrategy, margin call, michael saylor, Michael saylor margin call, microstrategy, bitcoin microstrategy, microstrategic bitcoin loan, A call to the margins of microstrategy, Silvergate Bank

What do you think about the rumors about Microstrategy margin call? Let us know in the comments section below.

Micro-strategy exposes margin rumors – says bitcoin liquidation is unnecessary even if BTC falls below $ 3,562 – highlighted Bitcoin news

Kevin Helms

A student of Austrian economics, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in the security of Bitcoin, open source systems, network effects and the crossroads between economics and cryptography.




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