MicroStrategy Will “HODL Through Adversity,” Saylor Assures

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MicroStrategy Will "HODL Through Adversity," Saylor Assures
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Despite the severe market downturn, Michael Saylor said MicroStrategy was not at risk of being liquidated. Saylor has said that the company expects volatility in Bitcoin and intends to “HODL in the face of adversity.” The MicroStrategy CEO has previously said that the company will only face complications if Bitcoin falls to $3,562.

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The recent market downturn prompted Michael Saylor to say publicly that MicroStrategy was not in danger of being liquidated. The company’s financial reports appear to support his claims.

MicroStrategy ready to deploy Bitcoin collateral

Michael Saylor maintains that despite the recent Bitcoin crash, MicroStrategy is not at risk of being liquidated.

MicroStrategy CEO Retweeted In a post today, May 10, he laid out the company’s financials. In the original post, MicroStrategy claimed that only if the asset fell below $3,562 would it be at risk of liquidation on a $205 million loan it received to buy bitcoin. Saylor said on May 10 that even if it did drop to the $3,562 level, MicroStrategy “could provide some additional collateral” to avoid liquidation.

Binance

Bitcoin has endured a turbulent week after falling to its lowest level since December 2020. It is currently trading around $22,500.

In response to market volatility, Saylor reiterated MicroStrategy takes a long-term view of its bitcoin holdings. “When MicroStrategy adopted a #Bitcoin strategy, it predicted volatility and structured its balance sheet so that it could continue #HODL in the face of adversity,” wrote Saylor, citing the “HODL” meme, referring to the “Holding” tokens in volatile market conditions.

MicroStrategy is the largest independent publicly traded business intelligence company in the United States. The firm began investing in Bitcoin as a treasury reserve asset in August 2020, citing a weaker U.S. dollar and global macroeconomic conditions.

According to its first quarter 2022 financial results Report, as of March 31, 2022, the company held a total of 129,218 bitcoins worth $2.9 billion. Its average purchase price is around $30,700, meaning Bitcoin would need to drop another 27% for the company to see a loss on paper. its investment.

other documents also programme 19,466 Bitcoin stash in MicroStrategy Commitment Collateralized a $205 million loan to Silvergate Bank to increase its bitcoin reserves. The collateral value at the time was $820 million; at today’s prices, it was closer to $440 million. MicroStrategy’s 95,643 bitcoins remain uncollateralized, meaning the company still has more than $2.1 billion in collateral to stake.

Shares of MicroStrategy (MSTR) are trading at $164.57 at the time of writing, up 7.79% on the day. Despite the gains, the stock is still 87% below its February 2021 all-time high of $1,311.

Disclosure: At the time of writing, the author of this article owns ETH and several other cryptocurrencies.

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