MicroStrategy’s CEO Claims that the Company has no Plans to Sell its Bitcoin Reserves

CEO of business intelligence organization MicroStrategy finally broke his silence on the matter of the recent crash of Bitcoin. It is worth noting that Bitcoin prices started on a new wave of cascading trends since the start of the current week, which saw the price of the top coin dive to $22K.

With these latest changes, Tesla and MicroStrategy, two of the biggest commercial enterprises that have invested in Bitcoin, decided to combine their impairment losses for Bitcoin acquisitions.

However, with the volatility of the market increasing, the greater crypto community has concerns about whether big players are going to keep holding on to their Bitcoin reserves or opt to dissolve their positions. The future course for the market value of Bitcoin is going to depend heavily on the decision of the whale investors like MS and Tesla.

MicroStrategy’s HODL Policy

At present, companies like Tesla and MS maintaining their HODLs of Bitcoin is more a matter of retaining the general confidence in the marketplace. Therefore, MS CEO Michael Saylor has come forward to ensure the Bitcoin investors that the company has been anticipating the upcoming volatility in Bitcoin prices and plans to keep their HODL policy to navigate through the bear market.

However, MicroStrategy has some other issues to worry about at present. The software development organization declared that it hosts a $250 million loan that requires the organization to maintain $410 million in collateral funds.

There is a chance if Bitcoin prices dip below $21K, the company can be looking at trouble. However, Saylor indicated that the company has around 115,109 Bitcoins to spare to pledge under such circumstances.

It is worth noting that MicroStrategy has continued to add more Bitcoins to its balance sheet since last year. The company also opted to apply for a $205 million loan from Silvergate Capital against 19,466 Bitcoins as collateral. In case the price of the Bitcoin falls below $21K, the company would have no choice but to invoke a margin call.

The direct outcome of the margin call can be MS selling a large portion of its Bitcoin reserves or pledging more collateral to prevent the loan lapse. The latest tweet by Saylor suggests that the company opted to invest its capital in Bitcoin while considering the volatility of the token.

He further mentioned that in case the price of the top coin dives to $3.5k, MS has other collateral to offer. President of MS, Phong Lee, recently told the media that the company owns around 95.6K undeclared Bitcoins that can be used as a pledge in case of increasing price volatility.

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