Key Takeaways
- Michael Saylor wrote on Twitter right now that MicroStrategy may simply provide extra Bitcoin to cowl the required collateral within the occasion of a margin name.
- MicroStrategy has borrowed $205 million from Silvergate Financial institution with Bitcoin as collateral.
- Saylor wrote that Bitcoin must fall under $4,000 earlier than the corporate would want any various collateral.
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Michael Saylor has weighed in on considerations that his firm’s Bitcoin-backed mortgage from Silvergate may very well be margin referred to as by stating his willingness to place up much more Bitcoin to take care of its place. By Saylor’s math, Bitcoin must drop under $4,000 earlier than the corporate would want different collateral within the occasion of a margin name.
Saylor Backs Bitcoin-Backed Debt
The MicroStrategy CEO is defending his firm’s controversial Bitcoin-backed mortgage place.
In a tweet this morning, Michael Saylor addressed considerations over the opportunity of a margin name on MicroStrategy’s hefty, Bitcoin-backed mortgage from Silvergate Financial institution.
Saylor wrote that the corporate had a further 115,109 BTC that it may pledge to take care of the required $410 million in collateral on its $205 million mortgage if wanted. He additionally wrote that Bitcoin’s worth must fall to $3,562 earlier than the corporate would want to submit different collateral.
Final March, MacroStrategy, a fully-owned subsidiary of MicroStrategy, took out a $205 million mortgage from Silvergate Financial institution to purchase extra Bitcoin. Buyers raised questions over the mortgage throughout MicroStrategy’s Q1 earnings call final week, notably over the opportunity of a margin name.
Phong Le, the chief monetary officer of MicroStrategy, said that the corporate would solely face a margin name if Bitcoin fell to $21,000. Nevertheless, Le emphasised that the corporate may add collateral (within the type of Bitcoin) to the mortgage with a purpose to keep away from being compelled into promoting its Bitcoin at a loss. MicroStrategy holds 129,200 Bitcoin, however its Silvergate mortgage solely makes use of round 19,466 Bitcoin for collateral.
Saylor has insisted that his firm has no plans to promote its Bitcoin.
Disclosure: On the time of writing, the creator of this piece owned BTC, ETH, and several other different cryptocurrencies.
