MicroStrategy’s large BTC position currently in the red


MicroStrategy, the company of Michael Saylor, is currently at an unrealized loss in terms of its Bitcoin holdings due to the continued collapse of the cryptocurrency market. The organization is the largest corporate holder of major digital assets with nearly 130,000 BTC.

Despite the bleak situation for the industry, Michael Saylor remains optimistic, predicting that Bitcoin will weather the collapse and bring profits to its owners.

MicroStrategy suffers from unrealization

An American business intelligence company, led by Bitcoin bull Michael Saylor, has shown enthusiastic support for cryptocurrencies several times. Over the past two years, the company has purchased numerous BTC, the last purchase was in early April of $190 million worth of assets.

With the latest amount, the company’s holdings have risen to 129,218 BTC, with an average price of around $30,700.

Recently, the digital asset market, specifically Bitcoin, has been detrimental to MicroStrategy’s BTC position, as it plummeted more than $10,000 in a week. At the moment of writing this line, the asset is hovering around $28,500, meaning the company is experiencing an unrealized loss of about $320 million.

In fact, Saylor doesn’t seem to be embarrassed by the market decline. Convinced several times that MicroStrategy would not sell BTC positions, the American predicted that Bitcoin would find its way back and benefit those who held it during turbulent times.

Silvergate’s Loans

Earlier this year, MacroStrategy (a subsidiary of MicroStrategy) received a $205 million loan as collateral from its BTC holdings. The funding was provided by US fintech company Silvergate Bank.

MicroStrategy has pledged to use these funds to purchase a larger portion of its key digital assets. Silvergate’s CEO, Alan Lane, spoke of this strategy:

“Their innovative approach to financial management is an exceptional example of how institutions can leverage Bitcoin to support and grow their businesses.”

However, as the price of Bitcoin plummeted, concerns were raised that the company was at risk of liquidation on multi-million dollar loans. Saylor explained that this scenario would happen if the BTC price fell below $21,062. Nevertheless, the company can use other bitcoins as collateral to extend margin calls.

Speaking of the company’s entire BTC portfolio, Saylor said:

“If the BTC price drops below $3562, the company can post another collateral.”

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