Michael Saylor says Bitcoin must drop to $3562 before margin call

Michael Saylor’s company, Microstrategy, recently acquired a $205 million loan with collateral of $410 million Bitcoin. The loan was provided by Silvergate bank and was one of the first corporate loans to be backed by BTC. So, the immediate question that arises is what happens if the price of BTC dips. It was asked in the Q1 earnings call of the company. There the quoted price for margin call was around $21k. However, in a recent tweet, Michael Saylor said Bitcoin must drop to $3562 before a margin call.

Microstrategy faces near to zero risk in their Bitcoin backed loan

The $21k price quoted in the earnings call by a company executive is the level where they would need to increase their collateral. Microstrategy has over $5B in BTC, and even though with falling prices, the value of its holdings will go down, they will still have a lot to be used as collateral. Michael said that the price needs to go to $3,562 before they need to liquidate, which means they can keep adding collateral till that point.

Michael Saylor says Bitcoin must drop to $3562 before margin call
Image Source: Crypto Potato

This statement from Saylor was important as there have been speculations that the company might sell its BTC. Some rumors were also floating around that Michael Saylor has been secretly selling his Bitcoins. That rumor was also discarded by him.

Now let’s also consider the scenario where the price of BTC does reach $3,500, which is highly unlikely; Michael says that they will add some other collateral but won’t liquidate their holdings. This adds more trust and ensures the bulls that the company is going to stick to its words.

About Microstrategy

MicroStrategy Incorporated is a firm established in the United States that offers business intelligence (BI), mobile software, and cloud-based services. The company, founded in 1989 by Michael J. Saylor, Sanju Bansal, and Thomas Spahr, creates software to evaluate internal and external data in order to make business choices and develop mobile apps.

It is a public firm based in Tysons Corner, Virginia, which is part of the Washington metropolitan region. SAP AG Business Objects, IBM Cognos, and Oracle Corporation’s BI Platform are its key business analytics competitors. Saylor is the CEO and chairman of the board of directors.

What are your thoughts as Michael Saylor says Bitcoin must drop to $3562 before the margin call? And do you think they will stick to their words? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.

Also Read: UST loses dollar peg while Luna foundation tries desperately to defend it.