Even whales bleed – Following a succession of bad news yesterday, June 13, the price of Bitcoin (BTC) fell to a low not seen since 2020. From the smallest retail crypto-investors to the biggest international firms, this is a time of pain. Among these, companies You’re here and MicroStrategy are particularly exposed to Bitcoin.
MicroStrategy stock drops as its Bitcoin bet nears margin call
Since August 2020, the company MicroStrategy has accumulated a gigantic bitcoin war chest: more than 129,000 BTC! Problem, with the king of cryptos’ endless price drop since the beginning of 2022, the company of Michael Saylor is now well below the cost price total of its BTCs.
The latter is established at approximately $30,700 per acquired bitcoin. The important unrealized loss (with BTC at $22,400 at the time of writing) resulted in the price of MSTR action since yesterday. The stock, listed on NASDAQ, fell by around -26%.
Worse still, at the end of March, MicroStrategy contracted a $205 million loan secured by part of its bitcoins near Silvergate Bank to… buy even more BTC! Except that with the latest drop in the prices of the queen of cryptocurrencies, the company is getting closer tomargin call (margin call) on his loan.
Indeed, as the Twitter user below reminds us in particular, this margin call is located just under the vicinity of $21,000. If BTC reaches this value – the price has already come very close to it in the early hours of June 14 – MicroStrategy shall add bitcoins as collateral, to avoid liquidation.
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Tesla drinks the broth with almost half a billion $ loss on its BTC
Again, this is an unrealized loss (until the bitcoins are sold), but the company You’re here is also in a complex situation, following its massive purchase of bitcoins in February 2021.
The Austin firm then invested $1.5 billion in the invention of Satoshi Nakamoto. With an average cost price of approximately 32,500 dollars per unit. With a current price around 22,400 dollars per bitcoin, in other words,Elon Musk isn’t in the mood for memes (yet!).
As Cointelegraph notably mentions, Tesla is approaching a virtual loss of $500 million on his crypto investment. No loans or margin calls to worry about here though, since the electric car maker bought those BTCs with the company’s dollar cash.
Despite these difficulties and nervous breakdowns in the Bitcoin and crypto market, the whales (the big investors) still seem very interested by this new asset class. Indeed, a recent report by the audit firm PricewaterhouseCoopers (PwC) showed that two-thirds of hedge funds (hedge funds) are ready to (re)invest in cryptocurrency by the end of 2022 (have they not already taken advantage of these sales?).
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