The central theses

  • Michael Saylor wrote on Twitter in the present day that MicroStrategy might simply ship extra Bitcoin to cowl the mandatory 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 beneath $4,000 earlier than the corporate wanted various collateral.

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Michael Saylor has expressed issues that his firm’s bitcoin-backed mortgage may very well be backtracked by Silvergate, declaring his willingness to speculate much more bitcoin to keep up his place. Based on Saylor’s math, Bitcoin must fall beneath $4,000 earlier than the corporate would want different collateral within the occasion of a margin name.

Saylor helps bitcoin-backed debt

MicroStrategy CEO Defends His Firm’s Controversial Bitcoin-Backed Lending Place

In a tweet this morning, Michael Saylor addressed issues about the opportunity of a margin name for MicroStrategy’s hefty bitcoin-backed mortgage from Silvergate Financial institution.

Saylor wrote that the corporate has a further 115,109 BTC to pledge to supply the required $410 million in collateral for its $205 million mortgage if wanted. He additionally wrote that Bitcoin’s value must drop to $3,562 earlier than the corporate must put up some other collateral.

Final March, MacroStrategy, an entirely owned subsidiary of MicroStrategy, took out a $205 million mortgage from Silvergate Financial institution to purchase extra Bitcoin. Buyers requested questions in regards to the mortgage, particularly the opportunity of margin calls, throughout MicroStrategy’s Q1 earnings name final week.

Phong Le, MicroStrategy Chief Monetary Officer, mentioned that the corporate would solely face a margin name if Bitcoin fell to $21,000. Nevertheless, Le emphasised that the corporate might add collateral (within the type of bitcoin) to the mortgage to keep away from being pressured to promote its bitcoin at a loss. MicroStrategy holds 129,200 bitcoin, however its Silvergate mortgage solely makes use of about 19,466 bitcoin as collateral.

Saylor has insisted his firm has no plans to promote its bitcoin.

Disclosure: On the time of writing this text, the creator of this text owned BTC, ETH and several other different cryptocurrencies.

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, Michael Saylor defends Bitcoin-backed mortgage

, Michael Saylor defends Bitcoin-backed mortgage

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