MicroStrategy’s Bitcoin (BTC) megahodler could survive a further drop in BTC’s price, even if it drops to just $3,500, its CEO confirms.
AT tweet On June 14, Michael Saylor tried to allay fears that the availability of BTC for his firm could cost them dearly.
Sailor remains calm as MSTR continues to fall
With the largest corporate bitcoin treasury, MicroStrategy has felt the pain of the BTC price crash this year – at least on paper.
According to the monitoring resource Bitcoin treasury bondsThe company’s 129,218 BTC stack is currently incurring a net loss of $1.06 billion — about two-thirds of its total market capitalization.
Rumors intensified this week of a potential default on the $205 million used to buy those reserves. In particular, a fall in BTC/USD below $21,000 will trigger a margin call, which could result in the loss of MicroStrategy’s position if it does not respond with additional capital.
In fact, BTC/USD has fallen to a low of around $20,800, but the company hasn’t wavered, and Sailor looks as cool as ever — even optimistic — in his approach to bitcoin.
“When MicroStrategy adopted the bitcoin strategy, it anticipated volatility and structured its balance sheet so that it could continue to HODL through adversity,” he told followers on Twitter.
Sailor linked to the previous tweet just after falling to $23,800 in May, a ten-month low at the time. In it, he outlined contingency plans, noting that even if all of the available BTC were placed as collateral for the loan — implying a BTC price below $3,600, the bottom of March 2020 — the pool of available cash would not end there.
“It’s all FUD,” he said media in a follow-up interview on the matter.
“We started with $5 billion of unsecured collateral, we borrowed $200 million against it, so the loan to value ratio is 4%. If bitcoin falls by 95% of that number, we will have to place additional collateral.”
He also called the issue of the margin call “nothing.”
However, not all market participants are so optimistic. A look at MicroStrategy’s share price this week reveals the pitfalls of bitcoin’s impact in terms of legacy markets: MSTR is now trading down 26.5% MoM and 73.4% YtD, according to data from trade view.
Bitcoin Corporate Pioneers Smile and Tolerate It
It’s not just MicroStrategy that’s struggling with the numbers as bitcoin is nearing eighteen-month lows.
In this together: Musk and Saylor lost a total of $1.5 billion on Bitcoin purchases
Bitcoin Treasuries data shows that Tesla, which owns the second largest BTC treasury, is currently suffering an unrealized loss of $535 million on its initial $1.5 billion investment.
Payment network Square’s $220 million stash has sunk $40.8 million, while North American mining giant Marathon is now suffering losses due to the distribution of 8,133 BTC.
Known for his crypto sounds, Tesla CEO Elon Musk has yet to break his silence on his take on the market.
Tesla shares have lost about 11% over the past month, including 1% at the June 14 Wall Street open.
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Credit : cointelegraph.com