MicroStrategy, the software giant that began investing in bitcoin in August 2020 and has since become one of the cryptocurrency’s largest institutional backers, lost more than $1 billion worth of BTC after the recent crash.
MicroStrategy still thinks BTC is the bomb
Bitcoin and various other digital currencies have not been doing well lately. In fact, they are in very bad positions. BTC, for example, hit a new all-time high of roughly $68,000 per unit in November of last year. Today, it is trading at just over $20,000 per unit, meaning virtually all of the gains the coin has made over the last five years are gone. The coin is down around 70%, while assets like Ethereum are even lower, trading around 75% below their all-time highs.
Despite the gloomy news, Michael Saylor, CEO of MicroStrategy, continues to defend BTC, stating in a recent series of tweets and social media posts that it is the best thing for the decentralized finance (defi) space.
On Twitter, Saylor wrote the following:
The strong ethical, economic, and technical foundation for defi is #bitcoin. The next generation of defi will be built using the #Lightning protocol and the #BTC token.He was also quick to comment on the recent behavior of the Securities and Exchange Commission (SEC) around the regulation of cryptocurrencies. He says:
Today @GaryGensler discussed #crypto regulation with @WSJ. Aside from #bitcoin, most cryptocurrencies (especially POS networks) represent unregistered securities without the full and fair disclosures necessary to protect investors.There is a dark cloud hanging over MicroStrategy as it recently took out a huge loan to buy even more units of bitcoin. This was before the recent bloodbath that started to take place, and it was claimed that if Bitcoin dropped to $21,000 or below, a margin call would be required. Now that the asset is below that threshold, people are wondering if that call will come through.
Saylor, however, is working to reassure merchants that the company is in a good place and no calls have yet been made. He stated:
As long as the Silvergate loan remains secured with an LTV of less than 50%, there will be no margin call. We manage accordingly.MicroStrategy, before its bitcoin purchases, was known for producing software, though now the company has become synonymous with the world’s number one digital currency by market value. The company started trading BTC about two years ago and hasn’t stopped since.
At one point, the company had over $5 billion in BTC funding, though that number has likely dropped significantly with the recent bear market in play. The company, however, has inspired many other institutions, such as Square, to take BTC seriously and start investing.