Back in March, the publicly listed company borrowed $205 million from Silvergate Bank in its quest to snap up more Bitcoin — using the BTC already in reserve as collateral.
Michael Saylor is attempting to play down fears about MicroStrategy's Bitcoin holdings — with the company now officially at risk of a margin call on a $205 million loan.
Back in March, the publicly listed company borrowed the eye-watering sum from Silvergate Bank in its quest to snap up more Bitcoin — using the BTC already in reserve as collateral.
MicroStrategy later confirmed in a conference call with investors that margin calls would kick in at $21,000 — a figure that was unthinkable up until a few days ago.
CoinMarketCap data shows that BTC skidded to lows of $20,514.10 in the early hours of Wednesday.
Although the business intelligence firm said Silvergate was yet to come knocking for additional collateral as of last night, that'll likely change today.
The company does have the option of adding further amounts of Bitcoin as collateral to prevent a liquidation being triggered.
In an update on Twitter, Saylor — one of the most vocal BTC bulls in the space — appeared undaunted. He wrote:
"When MicroStrategy adopted a #Bitcoin Strategy, it anticipated volatility and structured its balance sheet so that it could continue to #HODL through adversity."
'Stack Sats and Stay Humble,' Saylor Says
Saylor also encouraged his followers to "stack sats and stay humble" — and warned that, beyond Bitcoin, most cryptocurrencies are "unregistered securities"... especially those based on Proof-of-Stake blockchains.
Pointing to the carnage facing some crypto lending platforms, he wrote:
"The sound ethical, economic and technical foundation for DeFi is Bitcoin. The next generation of DeFi will be built using the Lightning protocol and the BTC token."
MicroStrategy owns close to 130,000 BTC and began accumulating crypto back in August 2020.
While this stash would have been worth close to $9 billion when BTC hit an all-time high of $68,789 last November, it's valued at just $2.7 billion today.
That's a fall of over $6 billion — and even more worryingly, MicroStrategy is down $1.2 billion when compared with how much it paid for this Bitcoin.