Valerie Plesch | Bloomberg | Getty Images The aggressive bitcoin investor and US software company MicroStrategy says it has not received a margin call against a $ 205 million loan it took out in March, according to a Reuters report on Wednesday. Margin withdrawal is a situation where an investor has to commit more funds to avoid losses in a borrowed cash transaction. CNBC reported Tuesday that investors are worried that MicroStrategy, which has bet $ 4 billion on bitcoin, would be forced to liquidate some of its bitcoin stakes if faced with a margin call. MicroStrategy did not respond to a request for comment from CNBC prior to the publication of this report. The world’s largest cryptocurrency fell just under $ 21,000 on Tuesday in this week’s big selloff. Shares of MicroStrategy, seen by some as a means of investing in bitcoin, have fallen more than 70% since the beginning of the year. Bitcoin was trading at $ 21,184.99 at 12.52 am. ET on Wednesday. In March, MicroStrategy borrowed $ 205 million in a three-year loan from encryption-focused Silvergate Bank to buy more bitcoin, using its own bitcoin to secure the loan. As of March 31, MicroStrategy held 129,218 bitcoins, each bought at an average price of $ 30,700, according to the company. The company is the largest corporate investor in bitcoin. The chief financial officer of MicroStrategy said earlier in May that if bitcoin fell below $ 21,000, it could trigger a margin call. “MicroStrategy has not received a ‘margin call’ against our Silvergate loan, although bitcoin prices have fluctuated recently,” the company told Reuters in an email.
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“We can always contribute extra bitcoin to maintain the required loan-to-value ratio; even at current prices, we continue to maintain more than enough additional unbound bitcoins to meet our loan agreement requirements,” said MicroStrategy. The loan-to-value ratio is a measure of how risky a loan is, comparing the amount borrowed with the value of the asset. Earlier in June, MicroStrategy CEO Michael Saylor said the company has more than enough bitcoin to meet its loan requirements. He said bitcoin prices would have to fall below $ 3,500 before more collateral could be required. Saylor also tweeted on Tuesday that the company expects volatility and has adjusted its balance sheet so that it can remain invested. MicroStrategy did not immediately respond to a request for comment from CNBC on Wednesday. – CNBC’s Ryan Browne contributed to this report.
