Michael Saylor Reassures Investors After Market Slumps Hurts BTC, MSTR

Michael Saylor, a MicroStrategy’s CEO and Bitcoin proponent is confident his firm’s BTC holdings will more than cover a potential margin call on Bitcoin-backed loans.

iexclusivenews reports that in 2021. The American corporate intelligence and software behemoth. Made headlines by making a series of significant Bitcoin bets.

MicroStrategy’s decision to convert its treasury reserve into BTC assets was influenced by Saylor.

This online news outlet understands that in early May, global markets suffered significant losses, and Microstrategy’s stock was not spared.

MSTR’s value has dropped by 24%, and the value of Bitcoin has also dropped significantly, as has the value of the broader cryptocurrency markets.

This is concerning because MicroStrategy. The company’s subsidiary. Took out a $205 million loan from Silvergate Bank in March 2022. With a portion of MicroStrategy’s Bitcoin used as collateral.

The funds were subsequently used to continue MicroStrategy’s BTC acquisition strategy.

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What You Need To Know 

iexclusivenews reports that if the price of Bitcoin falls too low. The Silvergate loan will be called due to the value of the collateralized asset falling.

It was a hot topic on the business’s May earnings call. With CFO Phone Le admitting that the company would have to sell some Bitcoin. If the price fell below $21,000.

iexclusivenews reports that on May 10, Saylor turned to Twitter to reassure investors about MacroStrategy’s capacity to repay its loans.

Which required $410 million in collateral. Saylor highlighted that the firm would have to run out of BTC to further back the debt. If the value of Bitcoin fell below $3,562 for the firm to run out of BTC to further back the loan.

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The corporation made headlines in August 2021 when it decided to invest a significant percentage of its capital in Bitcoin.

It made its initial $250 million investment after meeting its shareholder responsibilities. Giving the business 21,454 BTC for its treasury holdings.

At the time, Saylor indicated that the investment was driven by the company’s belief that Bitcoin is. “A dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.”

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Saylor was even more adamant. Insisting that Bitcoin was a better investment than fiat currency. And that the corporation had made Bitcoin its primary asset in its treasury reserve plan.

Meanwhile iexclusivenews Nigeria reports that in September 2020, MicroStrategy made another big Bitcoin purchase. This time for $175 million, adding another 16,796 Bitcoin to its portfolio.

From there, the company proceeded to buy BTC. Prompting CitiBank to lower MicroStrategy’s shares from “neutral” to “sell”. As a result of its plan to make Bitcoin its principal treasury reserve asset.