Bitcoin has dropped below the $20k level, and MicroStrategy has seen its stock price take a hit.
MicroStrategy is one of the leading corporate Bitcoin investors in the world. The company has invested billions of dollars in Bitcoin over the past few years, but the bear market has affected its stock performance.
Despite the bearish trend, MicroStrategy’s CEO Michael Saylor said there is no margin call on its Bitcoin loan at the moment.
He made this known during an interview with Bloomberg a few hours ago. The company’s loan was in focus as bitcoin’s price dropped closer to $21,000. Saylor said;
“As long as the Silvergate loan remains collateralized with an LTV less than 50%, there is no margin call. We manage accordingly.”
Saylor said MicroStrategy investors shouldn’t be worried about a potential margin call on its loan backed by BTC as the company has plenty of collateral to pledge if needed.
Bitcoin has been underperforming over the past few months. The leading cryptocurrency reached an all-time high of $69k in November 2021. However, it has lost more than 65% of its value since then and currently trades around $20k per coin.
MicroStrategy has also lost more than 70% of its stock value since the start of the year. MSTR was trading at $401 earlier this year. However, it is currently trading at around $156 per share.
Despite Bitcoin’s volatility, Saylor doesn’t think Bitcoin’s volatility is a problem for MicroStrategy. He stated that;
“When MicroStrategy adopted a Bitcoin Strategy, it anticipated volatility and structured its balance sheet so that it could continue to HODL through adversity.”
The cryptocurrency and stock markets have come under huge selling pressure from investors in recent months. The massive selloffs have been prompted by the rising interest rates, inflation and slow economic growth in various parts of the world.