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MicroStrategy CEO: We anticipated Bitcoin volatility and will ‘HODL through adversity’


finbold.com 14 June 2022 12:20, UTC
Reading time: ~2 m

As the cryptocurrency market is suffering one of its worst slumps in history, the times have been hard on most of its participants, including the software company MicroStrategy Incorporated (NASDAQ: MSTR), although its CEO remains optimistic.

Notably, Michael Saylor said that his company had anticipated the flagship digital asset’s volatility when it adopted a Bitcoin (BTC) strategy and is suitably equipped to withstand it, according to his tweet on June 14.

As he said, the company “structured its balance sheet so that it could continue to HODL through adversity,” linking to his tweet from May 10, in which he stated that should the price of Bitcoin drop below $3,562, the company could simply post some other collateral. The May tweet also stated that MicroStrategy had 115,109 Bitcoins it could pledge.

When @MicroStrategy adopted a #Bitcoin Strategy, it anticipated volatility and structured its balance sheet so that it could continue to #HODL through adversity. https://t.co/rPSUVPHUVw

— Michael Saylor⚡️ (@saylor) June 14, 2022

Avoiding margin call 

Notably, MicroStrategy, which has amassed a significant Bitcoin haul, has borrowed $205 million from crypto bank Silvergate Capital, with 19,466 Bitcoins as collateral. The loan terms oblige Saylor’s company to trigger a margin call if Bitcoin trades below $21,000.

As Finbold earlier reported, to avoid the margin call, MicroStrategy might be forced to sell part of its Bitcoin holdings or add more collateral to maintain its loan backed by the flagship digital asset.

All the while, MicroStrategy has maintained that it had no plans to sell its Bitcoin holdings, sticking to the buy-and-hold strategy that has proven profitable for the company, especially in 2021. 

It is also worth mentioning that MicroStrategy’s President Phong Le revealed in May that the company had 95,643 unencumbered Bitcoins that could be channeled towards serving as collateral.

Meanwhile, Bitcoin is currently trading at $22,117, which is a loss of 5.56% on the day and a 25.43% drop across the previous seven days, according to CoinMarketCap data.

Featured image via Lex Fridman YouTube

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