MicroStrategy CEO Michael Saylor has refuted speculation about his company potentially facing a margin call on its Bitcoin loan.
The Bitcoin advocate has clarified that such a scenario won’t take place as long as the loan-to-value (LTV) ratio stays below 50%.
Prior to that, Saylor tweeted that MicroStrategy’s balance sheet was structured in such a way to weather extreme volatility.
The business intelligence firm took out a $205 million loan from cryptocurrency-focused bank Silvergate Capital in order to fund its Bitcoin purchases. Back then, Saylor claimed that his company had managed to turn the flagship cryptocurrency into a “productive collateral” after a striking deal with the bank.
MicroStrategy has 129,218 Bitcoins in its coffers, which are worth roughly $2.8 billion at today’s prices. The Tysons, Virginia-based company has lost roughly $1 billion on its failed Bitcoin bet.
In May, MicroStrategy President Phong Le warned that the company could face a margin call if the Bitcoin price were to drop below the $21,000.
Earlier today, the top cryptocurrency slipped to as low as $20,816 on the Bitstamp exchange.
Alex DovbnyaSaylor has managed to revive this career after he infamously lost $6 billion in one at the peak of the dot-com bubble, becoming one of the most influential voices within the cryptocurrency community.
The shares of MicroStrategy surpassed the $1,000 mark for the first time since last February for the first time since March 2000. However, the rally wasn't sustainable, and the company's stock recently erased all of its Bitcoin-driven gains.
Gamza Khanzadaev
Tomiwabold Olajide
Dan Burgin
U.Today Editorial Team
Vladislav Sopov