MicroStrategy May Be Forced to Provide Additional Bitcoin as Collateral for its $205 Million Loan

The dip in BTC price to $22,600 has rekindled speculations about MicroStrategy's probable margin call on its $205 million debt, if Bitcoin falls below $21,000 according to documents on their website. In early May, MicroStrategy CEO Michael Saylor indicated that the business might submit alternative collateral for its loan than its Bitcoin stockpile if the price of BTC fell below $3,562. He noted that the company's Bitcoin holdings would equal the $410 million required as security for the loan in such a situation.

Bitcoin has had a turbulent weekend as it enters the new week, with its value plummeting to a new yearly low, according to the Bitpush terminal. The quick dip in Bitcoin's value has been attributed to the ongoing Celsius withdrawal pause, which has rendered the platform nearly bankrupt and has halted crypto user withdrawals. 

It's also worth noting that MicroStrategy's Bitcoin assets are now losing money. MicroStrategy has 129,220 Bitcoin acquired at an average cost of $30,700, according to OKLINK statistics. This is a total cost of $3.967 billion. The Bitcoin Microstrategy purchased is now worth $3.049 billion, representing the corporation's unrealized loss of $918 million.

MicroStrategy has recently transferred 2089 bitcoin ($48 million) to a new wallet for the first time, indicating that they are likely preparing to dump their bags and are now facing the greatest liquidation in history, according to CryptoWhale's tweet on Monday.

Author: Garrett Meifert

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