'Nothing issue' — MicroStrategy CEO plans to hodl Bitcoin 'through adversity'

Published at: June 14, 2022

Bitcoin (BTC) megahodler MicroStrategy can ride out further BTC price declines, even if it falls to just $3,500, its CEO confirms.

In a tweet on June 14, Michael Saylor sought to allay fears that his firm's BTC exposure may be about to cost it dearly.

Saylor stays calm as MSTR dips further

With the largest corporate Bitcoin treasury, MicroStrategy has felt the pain of this year's BTC price declines — at least on paper.

According to the monitoring resource Bitcoin Treasuries, the firm's 129,218 BTC stack is currently being held at a net loss of $1.06 billion — around two-thirds of its total market cap.

This week, rumors over a potential default on a $205 million used to purchase those reserves intensified. Specifically, BTC/USD dropping below $21,000 would trigger a margin call, potentially losing MicroStrategy its position if it did not respond with extra capital.

In the event, BTC/USD fell to lows around $20,800, but the company did not flinch, and Saylor appears as cool as ever — even bullish — on its Bitcoin approach.

"When MicroStrategy adopted a Bitcoin Strategy, it anticipated volatility and structured its balance sheet so that it could continue to HODL through adversity," he declared to Twitter followers.

Saylor linked to a previous tweet from just after May's drop to $23,800, which at the time was a ten-month low. In it, he outlined contingency plans, noting that even if all the available BTC were to be posted as collateral for the loan — implying a BTC price of under $3,600, the March 2020 bottom — the pool of available cash would not end there.

"That's all FUD," he told mainstream media in a subsequent interview about the issue.

"We started with $5 billion of unpledged collateral, we borrowed $200 million against it, so that's a loan-to-value ratio of 4%. If Bitcoin fell 95% from that number the we'd have to post additional collateral."

He additionally called the margin call question a "nothing issue."

Nonetheless, not every market participant is so optimistic. A look at MicroStrategy's share price this week shows the pitfalls of Bitcoin exposure from the perspective of legacy markets, MSTR now trading down 26.5% in a month and 73.4% year-to-date, according to data from TradingView.

Bitcoin corporate pioneers grin and bear it

It is not just MicroStrategy struggling with the numbers as Bitcoin heads to eighteen-month lows.

Bitcoin Treasuries data shows that Tesla, which owns the second-largest BTC treasury, is now nursing an unrealized loss of $535 million on its initial $1.5 billion investment.

Payment network Square's $220 million stash is underwater by $40.8 million, while North American mining giant Marathon is now at a loss on its 8,133 BTC allocation.

Tesla CEO Elon Musk, known for his crypto soundbites , has yet to break his silence on his view of the market.

Tesla stock has lost around 11% over the past month, including 1% on the June 14 Wall Street open.

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