MicroStrategy has been one of the market’s most prominent institutional Bitcoin holders. However, amid the market chaos, the CEO has called for urgent government action to control the crypto space.
The CEO believes that Bitcoin has been caught in the crosshairs of a largely unregulated market, with vulnerabilities in other assets affecting the leading cryptocurrency.
Flood of Crypto Assets Tainting Bitcoin’s Stability
Michael Saylor, the CEO of business intelligence firm MicroStrategy, has formally called for the government to step in and regulate the crypto market. Earlier this week, the Bitcoin evangelist appeared on a webcast with Sven Henrich, the founder of trading house NorthmanTrader. On the webcast, Saylor explained that Bitcoin has been a casualty of the collapsing crypto market.
Speaking on the broader market, Saylor described several other coins as a “$400 billion cloud of unregistered securities” that trade without adhering to any transparency laws. With many assets cross-collateralised with Bitcoin, the leading asset has now been roped into the collapse that these other assets began.
While Saylor has been critical of government intervention in the past, the CEO has now been vocal in his calls for regulators to control the crypto space. However, his calls aren’t necessarily for Bitcoin regulation. They are more for governments to clamp down on the issuance of other cryptocurrencies.
Saylor also took time to criticise crypto investment firms that appear to be propagating these “unregistered securities”. As he put it, the general public should not be purchasing these unregistered assets from “wildcat bankers that may or may not be there next Thursday”.
The statement appeared to be a thinly-veiled dig at Three Arrows Capital – the crypto investment firm that appears to be facing margin calls following the market downturn.
Margin Call Talk Is a “Nothing Issue”
Although Saylor has been posturing and calling for government regulation, his company has also been in the market’s crosshairs.
Data from Bitcoin Treasuries reveals that MicroStrategy is the market’s biggest institutional Bitcoin holder, with $2 billion in Bitcoin on its balance sheet. The company has been on a buying spree for over a year, and it got part of its haul by borrowing $205 million from crypto-friendly bank Silvergate.
Speaking at the company’s earnings call in May, MicroStrategy’s Chief Financial Officer Phong Le explained that the company might deal with a margin call if the price of Bitcoin falls below $21,000.
With the leading cryptocurrency trading below $21,000 for the most part of the past week, MicroStrategy has been at the mercy of the market.
Still, Saylor remains firm in his belief that MicroStrategy is financially stable. He told CNBC’s Squawk Of The Week that the company has not faced any margin calls, adding that MicroStrategy is currently “10x overcollateralized” on its Bitcoin loans.
Saylor also added that his company has a massive balance sheet and that the loans they took to buy Bitcoin are properly managed.
The CEO reinforced the stance in a separate media appearance, calling the talk of a margin call a “nothing issue”. As he explained, the company was well aware of Bitcoin’s volatility when they decided to add it to their balance sheet. So they are in a good position to hold Bitcoin through whatever adversity they’ll face.
While Saylor is putting on a brave face, there is little doubt that he must be feeling the pressure of the market. MicroStrategy’s stock has slumped by 67% since the start of the year, and the company’s Bitcoin stash is worth more than its actual market cap. With the market outlook still bleak, Saylor and MicroStrategy want things to get better quickly.
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