Microstrategy Denies Getting Margin Call On $205M BTC Loans

MicroStrategy denies getting a margin call on $205 million in Bitcoin-backed loans, saying that it remains optimistic despite the recent market downturn so let’s read more today in our latest Bitcoin news.

The biggest BTC holder remained optimistic despite the recent market downturn and Microstrategy denies getting a margin call against the $205B BTC-backed loans from Silvergate Capital while BTC dropped below the company’s liquidation price of $21,000. the NASDAQ-listed company started accumulating massive portions of BTC about two years ago and since then, it bought about 130,000 BTC with some purchases coming from excess cash while others executed after convertible note offerings. The company made history by taking a $205 million term loan from the silvergate bank that is collateralized by its own BTC holdings and the company used these funds to purchase even more BTC.

However, this came at a time when the cryptocurrency was trading at around $50,000 and since then, the asset increased by 50% the value in a few months which jeopardized the Microstrategy loan and raised risks of liquidation. Back in May, BTC already dropped to $30,000 and the company CEO and founder Michael Saylor said the loan required maintenance collateral worth $410 million to stay active. He also noted that the collateral company pledged was enough to keep this position safe until the BTC price drops to $21,062 which looked like it was unlikely to happen but then happened this week.

The Reuters report from June 15 cited a company statemetn that denied receiving a margin call against silvergate:

“We can always contribute additional bitcoins to maintain the required loan-to-value ratio. Even at current prices, we continue to maintain more than sufficient additional unpledged bitcoins to meet our requirements under the loan agreement.”

As recently reported, Microstrategy is the biggest corporate BTC holder and it is in the red for its BTC position. The company’s stocks went on a freefall today with a double-digit price crash leading to a multi-year low. What started in 2020 after the COVID pandemic broke out, became a crypto phenomenon.
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The US intelligence company started gathering huge portions of BTC with frequent purchases, some billions some worth smaller, and became the biggest corporate holder of the main cryptocurrency.