Screenshot 2022 05 04 at 15.15.08 z7PXHy

MicroStrategy could defend $21k BTC to stop a margin call

The MicroStrategy Q1 earnings call has revealed that they have a vested interest in keeping Bitcoin above $21,000 should there be a market capitulation. MicroStrategy currently owns 129,200 bitcoins, according to their CEO, Michael Saylor, who is one of the biggest supporters of Bitcoin. The company recently took out a $205 million loan backed by their bitcoin holdings to purchase additional Bitcoin.
In the earnings call, Phong Le, the CFO of MicroStrategy, explained that they have an LTV on the loan of 25%, meaning that they have put up 19,466 Bitcoin as collateral. Therefore, if the price of Bitcoin were to fall to $21,000, then they would be a margin call as the LTV would rise to 50%.
However, there is no suggestion that there would be an automatic liquidation. MicroStrategy would be required to add additional to the collateral held under custody.  As they have around $4.9 billion in Bitcoin under their ownership, this should be possible as long as that Bitcoin is liquid and not al

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