MicroStrategy CEO Michael Saylor is bullish on Bitcoin (BTC) even though it has already experienced a 70% drop from its all-time high. MicroStrategy stated that it had purchased hundreds of Bitcoin in recent weeks, although its present holdings and future purchases are already losing money.
MicroStrategy Continues to Accumulate Bitcoins Despite Crypto Winter
The company said during the period between May 3 and June 28, it acquired approximately 480 bitcoins for approximately $10.0 million in cash, at an average price of roughly $20,817 per bitcoin, inclusive of fees and expenses. With an average price of $30,664 per bitcoin, the business presently owns around 129,699 bitcoins. As of this writing, the company's Bitcoin acquisitions have cost it $1.34 billion.
Saylor also tweeted about his purchase, maintaining his positive confidence about the crypto market despite its recent rapid drop. When Bitcoin fell below $20,000 in June, there were reports that MicroStrategy could face margin calls on its Bitcoin-backed Silvergate loan. Saylor denied the allegations and even vowed to buy additional Bitcoin in mid-June, despite the fact that MicroStrategy's Bitcoin holdings were up to $1 billion in the red.
Saylor has also continued to tweet in favor of Bitcoin during the last month. In one of his tweets, he stated, "Bitcoin is the only investment-grade cryptocurrency," and in another, he said, "remain humble. "Stack sats," which refers to Satoshis, the smallest unit of Bitcoin. Despite the onset of crypto winter, Saylor remains confident in his conclusion that bitcoin is the best investment option.
Bitcoin Drops Below $20,000 Level, Saylor's MicroStrategy Unfazed by Threats of a Margin Call
Meanwhile, Bitcoin is locked in a struggle between bulls and bears to maintain the $20,000-support level in the face of dwindling liquidity and increased price volatility. Despite price reductions, Saylor and MicroStrategy seem undaunted by margin calls. MicroStrategy said in mid-June that the company had not received a margin call on its bitcoin-backed loan.
In March, the company secured a $205 million loan from Silvergate Capital by using 19,466 bitcoins as collateral. Bitcoin fell below $21,000, which should have resulted in a margin call.
"We can always contribute additional bitcoins to maintain the required loan-to-value ratio," MicroStrategy told Reuters in an email.
However, MicroStrategy's share prices are constantly decreasing. It fell 3.1 percent in premarket trade on Wednesday. In the grand scheme of things, the corporation has already lost around 24 percent in the last week and 71 percent since the beginning of the year.
MicroStrategy has prepared for such instability, according to Michael Saylor in a tweet. The business must keep $410 million in collateral, and MSTR has 115,109 BTC to commit, according to him. On May 10, he stated, "If the price of #BTC goes below $3,562, the corporation may submit some other collateral." MicroStrategy has built a position size of 129,918 bitcoins from sales of junk bonds and convertible notes since it began collecting bitcoins in August 2020, according to CoinDesk. Because of the decline in the value of bitcoin, the company's holdings are now worth less than $3 billion.
Meanwhile, it looks like MicroStrategy is taking steps to mitigate the impact of additional BTC price declines. According to CryptoWhale, the corporation "recently moved 2089 #Bitcoin ($48 million) to a new wallet for the first time ever, perhaps aiming to dump their bags." MicroStrategy CEO Michael Saylor stated in early April that he is more positive about bitcoin than ever before.
