Michael Saylor the chief executive officer of business analytics company MicroStrategy has dismissed rumours that the company’s Bitcoin investment is about to be liquidated. Saylor claimed in an interview this week after the business gets more bitcoins that the company is well-positioned to weather the continuing storm and would continue acquiring other coins.
MSTR received a three-year $204.7 million loan from crypto-focused lender SilverGate bank in March to fuel its Bitcoin acquisitions. The loan was secured by around $820 million in Bitcoin, which represented approximately 12 percent of MSTR’s assets. Saylor refuted claims that the company might soon be liquidated for less than $21,000 due to Bitcoin’s sustained price decline.
“When bitcoin was halved, we were still 10 times over-collateralized,” Saylor said Christopher Jaszczynski, the founder of the popular YouTube channel MMCrypto. This is the same as holding $1 million in security and borrowing $40,000 against it.
According to Saylor, shareholders would only begin to worry about the company’s financial stability if Bitcoin fell below 95%. Saylor continued, “If bitcoin falls by around 95%, we would have to commit further collateral.” If you do the calculation on our bitcoin investment, when bitcoin reaches about $3,500, we will need to find other collateral if it continues to decline.”
Saylor then defended the firm’s dollar-cost averaging method for accumulating BTC stressing that the company was in it for the long haul. “Our approach is straightforward: we purchase bitcoin, we retain bitcoin, and we don’t sell bitcoin. We think that 100 years from now, bitcoin will be like Manhattan, and you’ll want to own as many blocks as possible.” He carried on. According to him, the only two errors they could do would be to purchase Bitcoin with so much leverage that they are forced-liquidated during a drawdown or to cease collecting Bitcoin.
As for the continuing crypto crisis, the crypto millionaire urged investors to continue HODLing, noting that “if you are going to come early to a revolutionary technology and the first capitalized digital commodity in the history of the planet then rough rides are part of the game.”