According to MicroStrategy CEO Michael Saylor, Bitcoin may need to fall below $3,562 in order to post more collateral for its $205 million debt.
MicroStrategy secured a $205 million bitcoin-collateralized loan from Silvergate Bank in March to acquire additional bitcoin. According to Michael Saylor, the $205 million loan requires $410 million in collateral, but MicroStrategy does not need to put additional money into its positions. The business intelligence firm currently owns 115,109 BTC, which is worth nearly $3.6 billion at the current exchange rate, which it may offer as collateral for its $205 million debts.
According to MicroStrategy CFO Phone Le’s recent statements on the company’s most recent earnings call, if Bitcoin goes below $21,000, MicroStrategy may face a margin call from one of its loans. This might force the company to put up more security for the loan or sell part of its Bitcoin assets. On the other hand, CEO Michael Saylor insists that MicroStrategy’s Bitcoin stash will never be sold.
This recent comment from MicroStrategy’s CEO seems to assure investors that the company still has the liquidity to back its debts. Bitcoin has dropped about 18 % in the last week, trading at $31,746 at press time.
MicroStrategy has announced that as part of their 401(k) program, employees will be able to invest in Bitcoin.
Fidelity Investments, one of the largest financial services providers, announced the launch of Fidelity’s workplace Digital Assets Account (DAA) in April, the industry’s first offering that will allow individuals to allocate a portion of their retirement savings to Bitcoin through the core 401(k) plan investment lineup.
The new offering, which MicroStrategy intends to include in its 401(k) plan later this year, will be widely accessible to companies by mid-year.
