It's Practically Impossible For Microstrategy To Be Liquidated.
Michael “Diamond Hands” Saylor is liquidation free till Bitcoin drops below $3,562.
So many people in the crypto community have this notion that it is only a matter of time before Michael Saylor's company goes under the water due to the current Bitcoin crash and that he might have to dump his Bitcoin holdings just like how Terra Luna sold off $1.5 billion worth of bitcoin to save UST from crashing further and bring UST price back to $0.9 like other stablecoins. so the expectation was that Michael Saylor would do something like that (sell off his Bitcoin holding) so his company can avoid being liquidated, although that is not going to happen any time soon. But with the current market condition what will happen if he actually sold off his 129,218 Bitcoins, would that make the market crash further to maybe like $10k per Bitcoin or even go below that?.
On Twitter people have been speculating that MicroStrategy might get a margin call if Bitcoin continues to go down to some made up levels, I can remember one crypto influencer tweet that said once Bitcoin price gets to $20k MicroStrategy will be liquidated, Saylor being liquidated at 20k for me was one of the more ridiculous fantasies though. Now Michael Saylor has cleared the air, and it turns out that it is practically impossible for MicroStrategy to be liquidated, Until the Bitcoin price falls below $3,562. That's some good news because I too was scared for his company.
In his Tweet:
**MicroStrategy has a $205M term loan and needs to maintain $410M as collateral. $MSTR has 115,109 BTC that it can pledge. If the price of #BTC falls below $3,562 the company could post some other collateral. See slides 11-12 in Q1 2022 presentation. #HODL
Honestly, despite the Bitcoin crash, we all know that Bitcoin price won't ever come back to low $4k not to talk more of falling below $3,562, in my opinion no matter how bad the Bitcoin crash get I don't see it getting to $10k or below, that ship has sailed, so there is no way MicroStrategy would be required to post more collateral. So those that are speculating about MicroStrategy having a margin call should rest because nothing like that is going to happen. MicroStrategy current holds 129,218 Bitcoin and still remains the company with the highest amount of Bitcoin owned, they used to be followed by Terra luna's the Luna Foundation Guard, but after yesterday's saga and them selling off $1.5 billion worth of Bitcoin to save UST, Tesla should have taken over the Luna Foundation Guard spot now.
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