bitcoin

Bitcoin price crash: MicroStrategy’s BTC losses top $1 billion as CEO refuses to give up on crypto



The world’s biggest corporate investor in bitcoin has seen more than $1 billion wiped from its crypto holdings following the latest price crash.

Software firm MicroStrategy began stockpiling bitcoin in August 2020 and has so far spent $3.97 billion in less than two years.

The company owns close to 130,000 bitcoins, which fell in value to $2.6 billion after the cryptocurrency crashed by a further 10 per cent on Wednesday morning.

MicroStrategy CEO Michael Saylor said in May that if bitcoin fell towards $21,000 then a margin call may be triggered on a $205 million loan it took out with Silvergate Bank to buy BTC.

Despite bitcoin hitting this figure on Tuesday, and falling as low as $20,178 on Wednesday, Mr Saylor downplayed risks of a margin call.

“As long as the Silvergate loan remains collateralised with an LTV less than 50 per cent, there is no margin call,” Mr Saylor wrote in an email to Bloomberg. “We manage accordingly.”

In the midst of the latest downturn this week, Mr Saylor updated his Twitter profile picture to one with laser eyes, signalling his belief that bitcoin will recover and eventually rally beyond $100,000.

In a message to his followers on Tuesday, he said that MicroStrategy has no intention of selling its bitcoin, even if it fell below $4,000.

“When MicroStrategy adopted a Bitcoin Strategy, it anticipated volatility and structured its balance sheet so that it could continue to HODL through adversity,” he wrote.

The economist and prominent bitcoin sceptic Peter Schiff replied: “Volatility is one thing. This is a collapse. Did you anticipate something like this? If so, why buy so much bitcoin in the first place?”

Other notable corporate investor in bitcoin have also suffered as a result of the 2022 crypto crash, which has seen bitcoin’s price fall by more than 70 per cent from its record high of close to $69,000 in November.

Tesla, which holds 43,200 BTC on its balance sheet, has seen its initial investment drop from $1.5 billion to $921 million at today’s prices.





READ SOURCE

This website uses cookies. By continuing to use this site, you accept our use of cookies.