MicroStrategy can withstand bitcoin volatility: CEO amid margin call fears

MicroStrategy CEO Michael Saylor said on Tuesday the software firm was capable of withstanding volatility in bitcoin prices after the token slumped to levels that triggered fears of possible liquidation on its leveraged position.

MictroStrategy, an aggressive investor in bitcoin, said it borrowed $205 million from crypto bank Silvergate Capital in March, with the three-year loan mostly secured against some 19,466 bitcoins.

If the bitcoin price dropped below about $21,000, it would trigger a “margin call” or demand for extra capital, MicroStrategy President Phong Le said in webcast in May.

Bitcoin fell below that level to $20,816.36 on Tuesday before steadying near $22,000. Typically a margin call is met by providing more capital or liquidating the loan’s collateral.