Microstrategy’s Saylor Doesn’t Expect a Margin Call as Bitcoin Dips Below $21,000 By Investing.com
© Reuters Microstrategy’s Saylor Doesn’t Expect a Margin Call as Bitcoin Dips Below $21,000
By Senad Karaahmetovic
(BTC) price hit as low as $20,816 overnight, according to Coinbase data. This marks a fresh 18-month low for the embattled digital asset with the total crypto market cap trading below $900 billion at one point.
In early April, the total crypto market cap stood at over $2.1 trillion.
MicroStrategy (MSTR), an aggressive buyer of Bitcoin, had roughly 129,000 Bitcoins on its balance sheet as of the end of the first quarter.
It is still unclear whether the latest plunge in BTC price triggered a margin call given that the company’s President Phong Le warned about a move below $21,000, which would trigger a “margin call” or a demand for extra capital.
However, MicroStrategy’s founder and chief executive, Michael Saylor, is adamant he will not receive a margin call.
“We don’t expect to receive a margin call, and the company has plenty of additional collateral should we need to post more,” he told WSJ.
Le said recently that MSTR has 95,643 “unencumbered Bitcoin” that it could use as extra collateral.
Still, CoinGlass data shows that around $1 billion of collateral pledged by more than a quarter of a million retail traders has been liquidated over the past 24 hours.
“Risky and highly liquid cryptocurrencies are usually the first to be sold in a market selloff,” Jeff Mei, chief marketing officer at blockchain technology solutions provider ChainUp, told WSJ.
Bitcoin price currently trades at around $22,400.
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