Bitcoin (BTC) holdings of Microstrategy have fallen by 18% in the past day to $713 million, a loss of 18% in the company’s BTC holdings. To now, Michael Saylor’s firm has not sold any of its Bitcoin, but if the BTC price goes below $21k, it will be forced to sell.
When a margin call was issued, MicroStrategy’s CFO Phone Le had previously said that the business would either have to put up additional collateral or sell part of its bitcoin assets.
MicroStrategy possesses 129,218 BTCs at an estimated $3.97 billion at an average price of $30,700 each. Since Bitcoin (BTC) fell below $25k today, its value has fallen to $3.25 billion. A number of variables point to a drop to $21k as a likely outcome. Because to the stETH-ETH depeg and other variables, the BTC price is slipping. Inflation is on the rise, and the market as a whole is selling down.
For the purpose of purchasing Bitcoin, MicroStrategy has borrowed billions of dollars. A $205 million loan from Silvergate Bank, which is backed by bitcoin, was recently obtained by the corporation in order to purchase more of the digital currency. To put it another way, the firm is doomed if Bitcoin hits $21,000. The company’s billions of dollars in debt, slowing software sales, and exposure to a risky asset have investors nervous.
The company’s stock price has dropped by 64% in 2022, and it is presently trading at $203.36. So MicroStrategy’s core software company is not lucrative enough to cover the debt that it accrues.
As a result, Michael Saylor, the CEO of MicroStrategy, has expressed optimism about the future of Bitcoin. No, Saylor has no plans to sell the Bitcoins he currently has.
As of this writing, the price of bitcoin (BTC) is trading at $24,200 per coin. The previous seven days have seen a 25% decline. The fact that institutional investors and whales are continuing to liquidate their Bitcoin holdings suggests that the chances of the price falling anymore are fairly strong.
Investors in MicroStrategy may already be anticipating a margin call as the company’s financial risk increases. MicroStrategy’s decision to sell its Bitcoin assets will have a significant influence on the crypto market.