MicroStrategy scotches 'margin call' fears, says can withstand volatility
By
MicroStrategy (MSTR), an aggressive investor in the highly volatile
cryptocurrency bitcoin, borrowed
Should the price of bitcoins drop below about
Bitcoin fell below that level to
Silvergate declined to comment.
MicroStrategy (MSTR) shares rose 6% and Silvergate gained 3% in U.S. trade on Tuesday, following heavy selling on Monday.
Typically a margin call would be met by providing more capital or liquidating the loan's collateral.
"We can always contribute additional bitcoins to maintain
the required loan-to-value ratio," MicroStrategy (MSTR) said in a
statement emailed late on Tuesday in
"Even at current prices, we continue to maintain more than sufficient additional unpledged bitcoins to meet our requirements under the loan agreement."
MicroStrategy (MSTR) had also "anticipated volatility and
structured its balance sheet so that it could continue to #HODL
through adversity," Chief Executive Officer
The comments provided little relief for cryptocurrency markets roiled by the prospect of rising U.S. interest rates making risky assets less attractive, but analysts downplayed worries the price moves could trigger liquidation.
"We see no circumstance in which MicroStrategy (MSTR) is going to
need to sell any of its bitcoin holdings," said