CEO of software and cloud engineering behemoth, MicroStrategy, Michael Saylor, has said he is not losing sleep over the crypto markets despite his company losing over $1 billion via its Bitcoin investments.
In a series of tweets allaying fears over increased pressure on the MicroStrategy (MSTR) share price, Saylor confirmed that MicroStrategy is buoyant enough to withstand further declines in BTC price, up to $3,500.
MicroStrategy boasts the single largest corporate Bitcoin holdings, and with cryptocurrencies now in a full-fledged bear market, the tech company has borne the brunt of BTC price declines. According to Bitcoin Treasuries, the firm’s 129,218 BTC is being held at a net loss of over $1.1 billion.
Earlier this week, rumors began to intensify over a potential default on a $205 million loan used to purchase those holdings. These rumors indicated that a BTC/USD drop below $21,000 would trigger a margin call, which would require MicroStrategy to respond with extra capital or risk losing its position. This did occur, as BTC plunged to lows around $20,800, but the firm did not flinch. In fact, going by his tweets, Saylor appears bullish on its Bitcoin approach.
Taking to Twitter, Saylor wrote, “When MicroStrategy adopted a Bitcoin Strategy, it anticipated volatility and structured its balance sheet so that it could continue to HODL through adversity.”
In Saylor’s tweets, he referenced a previous tweet after BTC prices had dropped to a 10-month low of $23,800 in May. In the previous tweet, he outlined MicroStrategy’s contingency plans, stating that even if all the available BTC were posted as collateral for the $205 million loan — indicating a BTC price of under $3,600, the March 2020 bottom — the available cash would not end there.
Speaking to mainstream media in a subsequent interview about MicroStrategy’s financial health, he said “That’s all FUD. We started with $5 billion of unpledged collateral, we borrowed $200 million against it, so that’s a loan-to-value ratio of 4%. If Bitcoin fell 95% from that number then we’d have to post additional collateral.”