Michael Saylor: Bitcoin’s short-term downturn is not a “problem” for MicroStrategy
MicroStrategy CEO Michael Saylor stated that Bitcoin’s short-term volatility is largely a non-issue once investors understand the fundamentals of the cryptocurrency.
In a recent interview with The Block, one of the largest Bitcoin whales in the world, CEO Michael Saylor, once again expressed his extremely bullish view on Bitcoin (BTC) despite the downturn conflicts that the crypto market is creating in recent times.
He asserted that Bitcoin is the surest thing in an already very chaotic world, comparing the cryptocurrency industry alone BTC is worth more than 19,000 other altcoins, even the crypto king is worth owning more than any other stocks and assets in the world.
MicroStrategy already holds a massive Bitcoin position, around 129,218 BTC at the moment, and Michael Saylor has become the most ardent Bitcoin advocate globally since adding his decision to add BTC to his balance sheet company in August 2020.
MicroStrategy’s most recent purchase was made on April 5, with a purchase of 4,167 Bitcoins worth approximately $190.5 million through its subsidiary MacroStrategy, and a $205 million loan from Silvergate Bank while BTC was in circulation trading at $45,714.
In total, MicroStrategy purchased 129,218 BTC at an average price of $30,700. With Bitcoin trading volatility below $30,000 for the past several weeks, MicroStrategy whales are in a “stuck” position even though they have no plans to sell any BTC as previously stated by Michael Saylor.
He said Bitcoin will have to drop by as much as 95% before the company considers action. Because the price of BTC falls too low, it will trigger a MicroStrategy margin call on the Silvergate loan as the value of the collateral drops. Michael Saylor noted that only when the value of Bitcoin falls below $3,562 will Microstrategy run out of BTC to repay the loan.
Even so, he started the company won’t sell off any of its Bitcoin holdings if the worst-case scenario happens, but instead, MicroStrategy could use some other collateral as collateral. However, Microstrategy is probably really in a difficult position to solve the above problem.
Bitcoin price plummeted in May as the cryptocurrency market, as well as financial markets in general, came to a standstill. After the initial negative wave in prices as the macroeconomic environment was worsened by the Fed’s ineffective inflation-controlling rate hikes, crypto prices continued to plunge as the Terra blockchain collapsed pour quickly.
This spread dragged Bitcoin below $30,000 with nine consecutive weeks of red candles. While many researchers consider this clear evidence of crypto winter, Michael Saylor says he is not convinced by such analysis.
At the time of writing, BTC is trading at $30,200, a bounce as last week’s candle ended BTC’s nine-week losing streak.
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