The bitcoin market was extremely volatile and headed into declines that left many traders and panicked investors. Companies like Tesla and MicroStrategy are experiencing the same dilemma, with their bitcoins (BTC) having suffered considerable declines.
Microstrategy will sell its bitcoins under a certain price
Michael Saylor, CEO of Microstrategy, announced in a tweet that the company currently has a $205 million loan and needs $410 million collateral to stay afloat.
Now, Microstrategy can use its BTC holdings as a pledge or collateral. Also, if the price of BTC were to drop back down to around $3,600, the company could add additional safeguards.
Saylor has been a long-time bitcoin supporter. The company currently holds 129.218 BTC, or approximately $4.1 billion, at the time of writing.
Even though Microstrategy holds the largest amount of bitcoin among publicly traded institutions, the risks are still the greatest. For Saylor, even though BTC fluctuates wildly, he shows no plans or interest in selling their BTC holdings in the near future.
Indeed, he then tweeted “ The price of #bitcoin is set by those with more money and less knowledge than you. In time, they will have the knowledge and you will have the money. This shows a long-term will in bitcoin, it would not be surprising to see his partner reinvest in bitcoin and take advantage of the dip. The CEO of Microstrategy had even said that bitcoin was better than gold.
Tesla’s position is less direct
For its part, Tesla said that its investment in bitcoin was intended to diversify its sources of liquidity and increase its flexibility in order to largely compensate its shareholders.
However, Tesla announced in May last year that it would no longer accept bitcoin as a form of payment. She said she wanted to preserve the environment because the mining of bitcoin requires massive amounts of electricity. We know the relationship between bitcoin and Elon Musk, which was not always positive. Musk is indeed openly a follower of dogecoin, in which he has invested and made his children invest, but not Tesla. This memecoin can also be used in Tesla charging stations.
However, if bitcoin moves towards a mining greener, it is very likely that the boss of Tesla will reconsider its usefulness. Tesla, Block and Blockstream even announced in early April that they were joining forces to mine bitcoin from solar energy in Texas. A very important energy for Elon Musk.
However, no one knows where this vertiginous fall of bitcoin and other cryptocurrencies will end. Some see this as necessary to pull off bad projects, but this drop is likely to scare off many traditional investors and companies.
However, as always bitcoin (BTC) will survive this bear market, maybe not many altcoins, but bitcoin continues its course in the global change of currency control and still offers its holders a decentralized and uncontrollable tool by an outside entity.
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Passionate about geopolitics, economy, cryptocurrency, Eurasia and travel! (as far east as possible), crypto-trader for 4 years.