Early last month, MicroStrategy CTO Phong Lee reassured concerned shareholders that the biggest Bitcoin holder among publicly traded companies had nothing to worry about as another Crypto Winter approached. “Essentially, Bitcoin needs to be cut in half, or around $21,000, before we’d have a margin call,” Lee told investors on a quarterly earnings call

It would appear the once-unthinkable day has already come.

Early this morning, the price of Bitcoin briefly slipped below $21,000, hitting a 52-week low, before recovering to a price of $22,260 at time of writing. The price drop marks a significant line in the sand for MicroStrategy, which took out a $205 million loan in March from Silvergate Bank to stockpile Bitcoin. If BTC falls and stays below $21,000, the event would trigger a margin call on MicroStrategy’s loan, a potentially disastrous event that would require the company to offload tens of thousands of Bitcoins onto the already bearish market. Per the company’s latest earnings report, MicroStrategy currently holds 129,218 BTC. 

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And yet, this morning, MicroStrategy CEO Michael Saylor took to Twitter to double down on his company’s Bitcoin play, claiming that he and MicroStrategy are ready to weather this market storm, and future ones of far greater severity: 

The Silvergate loan requires $410 million in collateral. Per Saylor, even if Bitcoin’s price were to settle below $21,000, triggering a margin call on the loan, MicroStrategy possesses enough additional BTC for collateral. Only if Bitcoin’s price were to fall below $3,562 would that additional BTC supply be insufficient to collateralize the loan. Saylor has previously claimed that in such an event, MicroStrategy has further collateral at its disposal. 

The fact that, just a month ago, MicroStrategy’s CTO attempted to convince shareholders that today’s events would never come, speaks to the current volatility of the crypto market, and the unpredictability of when it will reach bottom.

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If the price of Bitcoin ever dropped low enough that MicroStrategy found itself unable to maintain $410 million in loan collateral, the company would be forced to start selling off huge quantities of Bitcoin at once to pay the loan back, an event that would likely further plummet the cryptocurrency’s price, and potentially send disastrous ripple effects across the broader crypto market.

Saylor and MicroStrategy remain assured, at least publicly, that such a day will never come. The market seemed to buy it: the company’s stock is up almost 3% today, after plummeting 54% during last month’s crypto crash.

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