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29 March 2024
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Michael Saylor talks about MicroStrategy’s stance on bitcoin

MicroStrategy co-founder and CEO Michael Saylor spoke about liquidating the company’s position on bitcoin.

In an interview with CNBC, Saylor says that a margin call is very unlikelygiven the “adequately collateralized” position of bitcoin that MicroStrategy acquired through debt.

Margin calls, or “margin calls” in English, are mechanisms that guarantee the security of a broker. It is, in short, requesting new guarantees when the existing guarantees are not sufficient for the broker to maintain leverage offered to the customer.

According to IEB professor Carlos Fernández, when a broker makes such a request, the investor can provide more guarantees, or allow the broker to close this positionmaterializing losses.

However, the CEO of the business analytics software company claims to be comfortable with the company’s financial situation and to have loans “well managed.”

On a multi-billion dollar balance sheet, we only have one $200 million loan that we have to guarantee. And we’re 10 times more collateralized on it right now.

As for the company’s overall balance sheet strategy, we borrowed $2.2 billion at a combined interest rate of 1.8% before they doubled.

Know more: Fed makes biggest interest rate hike in 28 years

Bitcoin is trading at $20,494 at the time of writing. MicroStrategy holds 129,218 bitcoin purchased at an average price of approximately $30,700, which translates to a loss in investment value of approximately $1.31 billion.

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