MicroStrategy’s Involvement in Bitcoin brings it Under Investors’ Microscope

Since August of 2020, MicroStrategy has proven itself to be one of the most aggressive investors of Bitcoin (BTC). The intelligence company has continued accumulating Bitcoin on a very large scale. Up until now, MicroStrategy has spent billions in the accumulation of over 100k Bitcoins.

Given the recent downtrend in Bitcoin, the position of MicroStrategy is now being questioned by investors. Even the investment channels and other entities concerned with the economic situation want to know what MicroStrategy plans on doing.

MicroStrategy Denies Making Margin Calls

The constant drop in the trading price of Bitcoin has raised many concerns among investors. As one of the largest investors in Bitcoin, MicroStrategy seems to have come under great fire.

The intelligence giant is now being questioned about a rumor of a margin call. It has been claimed that a margin call has been received by MicroStrategy. It is being claimed that the margin call is for the bitcoin-backed $205 million loans that were acquired by MicroStrategy.

The business intelligence company had acquired the loan in the month of March. The report surrounding the margin call was published by Reuters.

Situation Faced by MicroStrategy

From the year 2020 until now, MicroStrategy has invested around $4 billion in the acquisition of Bitcoin. If the rumors regarding the margin call are true, then MicroStrategy will be forced to liquidate some of the Bitcoin it has under its possession.

This could be a huge loss for MicroStrategy given the fact it had acquired Bitcoin at an average purchasing price that was around $30k.

Many business-oriented channels tried approaching MicroStrategy to get their comments on the matter. However, the officials did not respond to any requests for comments on the matter.

How Bitcoin has plunged and is Hampering MicroStrategy’s Performance

The price of Bitcoin ended up taking a huge plunge where its price dipped to $21,000 on June 14. The price of Bitcoin tumbled due to the strong selling of Bitcoin by the investors. Due to its strong link with Bitcoin, the share prices of MicroStrategy have dipped by over 70% since the beginning of 2022.

MicroStrategy’s overall Bitcoin holdings are 129,218 BTC. On average, MicroStrategy spent $30,700 per Bitcoin bringing its accumulation up to this mark.

MicroStrategy Denies Margin Call Claims

According to the CFO at MicroStrategy, if the price of Bitcoin were to drop lower than $21k, it would have resulted in a margin call.

The CFO reassured they have received no such margin call against the loan they had acquired for acquiring more Bitcoin.

Following the claims, the share prices for MicroStrategy have recovered 3.10%. At present, MicroStrategy’s share is trading at $156.87 but if Bitcoin price dips below $21k, its share prices can plunge tremendously.

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