Microstrategy and Bitcoin Fluctuations

Michael Saylor, CEO of MicroStrategy, has refuted speculation that his company could face a margin call on its Bitcoin loan.

The bitcoin proponent made it clear that such a scenario would not happen as long as the loan-to-value (LTV) ratio remained below 50%.

Before that, Saylor tweeted that MicroStrategy's balance sheet was structured in a way that beats extreme volatility.

MicroStrategy has secured a $205 million loan from crypto-focused bank Silvergate Capital in order to fund its bitcoin purchases.

At the time, he told Saylor that his company was able to convert major cryptocurrencies into product collateral after a deal with the bank.

MicroStrategy has 129,218 Bitcoins in its vaults, which are worth about $2.8 billion at today's prices.

Virginia-based MicroStrategy lost nearly $1 billion in a failed bet on Bitcoin.

In May, MicroStrategy's chief financial officer, Fong Li, warned that the company could face a margin call if the price of Bitcoin drops below $21,000.

Earlier today, the top cryptocurrency fell as low as $20,816 on trading platform Bitstamp.

The company switched to bitcoin in August 2020, adopting the world's largest cryptocurrency as its primary reserve asset.

The company announced its big bet on bitcoin a few months before the start of the bitcoin rally.

Saylor has managed to get back into the limelight after losing $6 billion badly at the height of the dotcom bubble, and is now one of the most influential voices in the cryptocurrency community.

MicroStrategy's shares crossed the $1,000 mark for the first time since last February, and for the first time since March 2000.

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