MicroStrategy’s Bitcoin (BTC) holdings suffered a loss of $ 713 million, down 18% when the BTC price fell below $ 25k in the last 24 hours. The company, led by Michael Saylor, has so far not reported that he has sold his Bitcoin stake but he is facing a ‘margin call’ situation if the BTC price falls to $ 21k.
MicroStrategy Phone Le’s Finance Manager previously stated that the company would need to put more collateral on the loan or sell some of its bitcoin holdings if faced with a margin call situation.
MicroStrategy so far has 129,218 BTC at an average price of $ 30,700, worth nearly $ 3.97 billion. However, its value has dropped to $ 3.25 billion after the price of Bitcoin (BTC) plunged below $ 25k today. Furthermore the probability of falling to the $ 21k price level is also seen to be high based on several factors. Rising inflation, prompted sales in the market amid pressure. Not only that depeg stETH-ETH and several other factors such as the expectation of rate increase also pushed the price of BTC to fall lower.
MicroStrategy has taken out billions in the form of loans to buy Bitcoin. Recently, the company issued a $ 205 million bitcoin-secured loan with Silvergate Bank to buy more bitcoin. If the BTC price hits $ 21k, the company will be in the worst possible situation.
Investors are now in a state of worry. This is reflected through a fall in the company’s share price which has fallen 64% in 2022, with the price currently trading at $ 203.36. This is even more troubling when MicroStrategy’s business is not profitable enough to pay off the debt.
However, MicroStrategy CEO Michael Saylor has previously been positive about the future of Bitcoin, believing that it is a store of value and a protector of inflation. Saylor reportedly has no intention of selling his Bitcoin holdings.
The latest Bitcoin Price (BTC) has fallen over 13% in the past 24 hours, with the current price trading at $ 23,695.67. The BTC price has fallen by 24.44% in 7 days.
