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MicroStrategy Risks Margin Call as Bitcoin Drops Below $21,000, Shares Plunge

MicroStrategy, the largest corporate holder of bitcoin, is sitting on an unrealized loss of more than $1 billion, and finds itself on the precipice of a margin call as the price of BTC plunges below $21,000.

MicroStrategy Risks Margin Call with Further Bitcoin Plunge

Following Bitcoin’s sink to under $21,000, MicroStrategy is at its closest point to its CFO receiving a margin call at $21,000 on the company’s massive BTC position.

Phong Le, MicroStrategy’s President, said in the May conference meeting, “Bitcoin needs to cut in half for around $21,000 before we’d have a margin call.”

The cost of acquisition for MicroStrategy’s 129,918 bitcoin stash stands at an average of $30,700 per coin, at net fees and expenses.

MicroStrategy Shares Plunge 23%

As the largest holder of Bitcoin, with 129,218 coins, the share prices of MicroStrategy (MSTR) were some of those to have suffered the heaviest losses as the price of Bitcoin crashed under $21,000.

On Monday, June 13th, the share price of MSTR slumped by as much as 23%, and MSTR now trades at $152.15 at the time of writing, with prices having dropped 31.37% over the last five days. 

On the Flipside

  • In May, Co-Founder of MicroStrategy Michael Saylor dismissed talks of a margin call, stating that a problem would only occur if bitcoin reached $3,562.

Why You Should Care

Despite the ongoing bear market, MicroStrategy has vowed never to sell any of its approximately 130,000 bitcoin holdings.

Read more about the Bitcoin crash:

Crypto Stocks Sell-Off as Bitcoin Sinks

Despite the crash, MicroStrategy continues to hold its bitcoin. Find out more here:

Michael Saylor Dispels Rumors that MicroStrategy Is Selling Bitcoin, Promising Further Acquisitions

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

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Author

Milko Trajcevski has been in the crypto world for years, and as such has gathered both a skill for writing as well as a native prowess when it comes to understanding everything that occurs within that world. Through skilled writing and determination, he covers articles about cryptocurrency, tokens, blockchain, crypto-asset regulations, crypto wallets, exchanges, liquidity, DApps, forks, mining, security, and blockchain technologies. He is a professional with a track record of proven expertise within the crypto space.