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Michael Saylor Confirms He Doesn't Expect a Margin Call

Tyler Irvin

Summary: Michael Saylor, co-founder and CEO of MicroStrategy, told the Wall Street Journal overnight that they do not expect to receive a margin call for their $205 million loan from Silvergate Bank, despite the price decrease in Bitcoin, that has seen it drop to $22,534 at the time of writing, according to Bitpush Terminal data. In ...

Michael Saylor, co-founder and CEO of MicroStrategy, told the Wall Street Journal overnight that they do not expect to receive a margin call for their $205 million loan from Silvergate Bank, despite the price decrease in Bitcoin, that has seen it drop to $22,534 at the time of writing, according to Bitpush Terminal data. In addition, Saylor noted that they still have roughly 95,000 Bitcoins unencumbered, which means they could always post more as collateral for the loan.

"We don’t expect to receive a margin call, and the company has plenty of additional collateral should we need to post more," Saylor said.

Saylor and MicroStrategy previously detailed their holdings of 129,218 Bitcoins, currently worth around $3 billion, in their first quarter of 2022 financial results. They also showed that out of their 129,218 Bitcoins, 95,000 of them unencumbered, which means they are free to be used or pledged at any given time.

Here is a look at a chart in their first quarter of 2022 financial results which details their Bitcoin-backed loan.

Here is their current Bitcoin reservoir, as outlined in the same financial results.

The MicroStrategy chief also previously mentioned that Bitcoin would need to drop to $3,500 in order for the company to receive a margin call, in which they could simply pledge more collateral to back the loan and avoid the margin call.

“When MicroStrategy adopted a Bitcoin Strategy, it anticipated volatility and structured its balance sheet so that it could continue to #HODL through adversity,” Saylor tweeted this morning.

The long-time Bitcoin proponent and enthusiast doubled down on his Bitcoin stance, when he tweeted, “stack sats and stay humble,” referring to satoshis, which are 1/100,000,000 of a single Bitcoin.

In short, the goal of a lot of Bitcoin investors is to keep on acquiring more Bitcoin, which to the average noninstitutional investor is done through acquiring satoshis or sats, because they are much cheaper than a full Bitcoin.

He also tweeted Tuesday morning that “The sound ethical, economic & technical foundation for DeFi is #Bitcoin,” in response to a Bloomberg article suggesting that decentralized finance (DeFi) is in turmoil after the recent series of events that has seen Bitcoin drop in price, Celsius pausing withdrawals, Swap and transfers and Coinbase to lay off 18% of their employees.

It’s clear that while the Bitcoin world and crypto space as a whole is a wreck, Saylor is doubling down on his Bitcoin stance.

BTIG research analyst Mark Palmer tweeted this morning, confirming that MicroStrategy does indeed have 129,218 Bitcoins and that 95,643 are unencumbered and available if MicroStrategy receives a margin call.