The cloud software company MicroStrategy today announced another Bitcoin buy – this time spending $ 10 million on the cryptocurrency – despite the fact that the price of the asset falls below $ 20,000.
The technology company has now spent over $ 3.98 billion on Bitcoin, and owns 129,699 digital coins, according to CEO Michael Saylor. It is also a loss of 1.3 billion dollars since the price of the currency has fallen.
MicroStrategy CTO Phong Lee last month told shareholders that if the price of Bitcoin fell below $ 21,000, the company would face a margin requirement of one $ 205 million loan that it took out in March to buy more BTC. The price of Bitcoin is currently just under $ 20,000-70% lower than its record high in November of almost $ 69,000, per CoinMarketCap data.
A margin call is when a margin account (a type of account offered by brokerage firms that allow investors to borrow money to buy other assets) has little funds, usually due to a losing trade.
A margin call in the case of MicroStrategy would potentially have meant the forced sale of the Bitcoin holding to prevent further losses for shareholders. But Saylor does not seem worried.
Earlier this month, the MicroStrategy chief took to Twitter to remind followers (and investors) and the company “predicted volatility and structured the balance so that it could continue to HODL through adversity.” Saylor had previously raised concerns about margin calls in May, assuring shareholders that although the price of Bitcoin continued to fall, his company was prepared to “provide some other security. “
Even when Crypto Winter sets in, the chief technology officer seems steadfastly convinced that Bitcoin will rise in value in the long run.
MicroStrategy started its Bitcoin buying round back in 2020 when it originally used $ 250 million on the asset. Saylor repeatedly the espionage the largest and oldest cryptocurrency as a “safe haven” asset and “digital gold”.
But Bitcoin has been closely correlated with the US stock market—Especially technology stocks– More than anything else in 2022, and has taken a beating this year, and has lost 57% (521 billion dollars) of market value since January.
The MicroStrategy stock was down 5.21% today, trading at $ 176.42 per share.
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