As the cryptocurrency market has fallen, there has been discussion that MicroStrategy is facing a margin call. For his part, the company’s CEO Michael Saylor said that’s not possible.
“We don’t expect a margin call, the company has enough collateral,” Saylor said in an interview with the Wall Street Journal.
In March, MicroStrategy borrowed $205 million from Silvergate Bank to supplement bitcoins, with the company’s existing BTCs used as collateral for the loan.
Analysts suggest that if the price of bitcoin falls below $21,000, MicroStrategy would face a margin call because the company was buying the asset with borrowed funds.
However, Saylor reiterated that the bitcoin price must reach the $3500 level before the company runs out of collateral.
“When MicroStrategy adopted the bitcoin strategy, it anticipated volatility and structured its balance sheet to keep going even in adversity,” Saylor wrote on Twitter this morning.