We anticipated Bitcoin volatility and will “HODL through adversity”
As the cryptocurrency market suffers one of the worst crashes in its history, times have been tough for most of its participants, including software company MicroStrategy Incorporated (NASDAQ: MSTR), although its CEO remains optimistic.
Notably, Michael Saylor said his company anticipated the volatility of the flagship digital asset when it adopted a Bitcoin (BTC) strategy and is suitably equipped to weather it, according to its Tweeter June 14.
As he said, the company “structured its balance sheet so that it could continue to HODL through adversity,” in line with its Tweeter from May 10, in which he stated that if the price of Bitcoin falls below $3,562, the company may simply post further collateral. The May tweet also stated that MicroStrategy had 115,109 Bitcoins it could pledge.
Avoid margin calls
Notably, MicroStrategy, which amassed a large transport of Bitcoin, borrowed $205 million from crypto bank Silvergate Capital, with 19,466 Bitcoins as collateral. The terms of the loan require Saylor’s company to trigger a margin call if Bitcoin trades below $21,000.
As Finbold previously reported, to avoid the margin call, MicroStrategy may be forced to sell some of its Bitcoin holdings or add more collateral to maintain its loan backed by the flagship digital asset.
Throughout, MicroStrategy has maintained that it has no intention of selling its Bitcoin holdings, sticking to the buy-and-hold strategy that has proven profitable for the company, by especially in 2021.
It’s also worth mentioning that MicroStrategy President Phong Le revealed in May that the company has 95,643 unencumbered bitcoins that could be channeled as collateral.
Meanwhile, Bitcoin is currently trading at $22,117, down 5.56% on the day and down 25.43% over the previous seven days, according to data from CoinMarketCap.
Featured image via Lex Fridman Youtube