Topic: Michael Saylor margin call if Bitcoin dumps below $21,000 (Read 835 times)

His money? You mean money he got in loans in the name of his investors!

If MicroStrategy goes down it's not Saylor who will be going to be the one counting the losses it's the guys who loaned MS money and the guys who invested in that company, it's the same with Bukele, he didn't buy coins for Salvador from his pocket, he used government funds, aka people's money to do it. It's pretty easy to be bullish and not care about the price drop when it's actually not your money at stake.


If you print money or shares and you don't care about them as long as you get $ which you can use however you want it's pretty easy to ignore that, how many times have we seen companies issuing shares after shares, getting tons of investors money and then delivering nothing with anybody facing any punishment for that? Look at what Faraday Future has done to billions in investments and despite losing all the money the next month they got another one and lost that money again and so on for 7 years in a row. And despite that, they still got listed on NASDAQ where their shares are down 92% to date.

On the one hand, it is clear that he puts his money where his mouth is, he cannot be accused otherwise.

On the other hand, I think he is in a kind of flight forward. After what he said about bitcoin, there is nothing left for him to do but keep on buying, because even if he were to back down, it could affect the market.

Can you imagine if he sold part of his bitcoin, as Musk did, to obtain liquidity? I think the market would react to the news with a downward reaction.

I am not quite certain why Michael Saylor continues to buy bitcoin right before a dump begins. If bitcoin continues to dump he might become a forced seller and be forced to dump some of those coins to control his losses. I reckon an investor must sometimes reduce the size of the investment to keep much of it away from risk.



On September 20, 2022, MicroStrategy Incorporated (“MicroStrategy”) announced that, during the period between August 2, 2022 and September 19, 2022, MicroStrategy acquired approximately 301 bitcoins for approximately $6.0 million in cash, at an average price of approximately $19,851 per bitcoin, inclusive of fees and expenses. MicroStrategy purchased the bitcoins using excess cash. As of September 19, 2022, MicroStrategy, together with its subsidiaries, held an aggregate of approximately 130,000 bitcoins, which were acquired at an aggregate purchase price of approximately $3.98 billion and an average purchase price of approximately $30,639 per bitcoin, inclusive of fees and expenses.

Source https://www.microstrategy.com/content/dam/website-assets/collateral/financial-documents/financial-document-archive/form-8-k_9-20-2022.pdf

I'm with you Og, I'm having a hard time believing Saylor, esp the <4k claim.  Guess he has to present a good face and project confidence in light of the recent re-org events.

@franky1. Agreed. Tulip mania is a story of a market bubble of overpriced tulips and an explanation on human behavior. There are similarities between the market bubbles of the tulip mania, the internet IPO bubble, the housing bubble and 2017's crypto ICO bubble. After all the speculation on the cryptospace, we can be quite certain that the market's real price levels will be discovered.

In any case, news update.

It appears Michael Saylor, Microstrategy's new head of strategy for bitcoin purchases, plans to buy more bitcoin. I hope this does not imply that the pump is over similar to his other purchases hehehehe.



MicroStrategy could sell up to $500 million in class A common stock and could buy more bitcoin.

A new prospectus filed with the Securities and Exchange Commission (SEC) says the firm has entered into an agreement with agents Cowen and Company and BTIG to sell up to $500 million in stock with a possible eye towards acquiring more bitcoin.

Source https://www.theblock.co/post/169010/microstrategy-could-raise-up-to-500-million-to-buy-bitcoin

people cry "end of bitcoin" or "bitcoin is dead"

the function of making transactions is not determined by price.
bitcoin s function is determined by code. and as of yet there is no known bug that can break and kill bitcoin.

i am able to make a transaction and get it confirmed at any price.
so once the old players panic and sell out. its their loss. the buyers that bought the coin are going to continue on.
if the price did tank to low prices. then the new buyers of those loss(discount) prices are going to continue on. bitcoin will still run and function and make blocks. people will still use it.

if saylor did lose all his coins then new buyers will be gaining coins.
a huge discount just means better opportunity for the new buyer on the next cycle.

..
alot of people scream "tulip mania"..
but did you know this one fact people forget.
even hundreds of years later.. people still buy and sell tulips. garden stores still make money everyday selling tulips.

yes hundreds of years ago some large investors lost alot in the tulip craze of that era, but today people are still making money buying and selling tulips

bitcoin will continue functioning no matter the price and people will still make profit

But the danger is that if bitcoin reaches the price of $3562 and the company decides to sell all of Saylor's coin then just imagine what disaster it would cause.
57k bitcoins selling at a price of $3.5k would literally drag the price further down and it may go below $1k or $500.
Who knows it might even be the end of bitcoin since there will be a hell lot of panic in this case.
But I hope that doesn't happen.

It's very hard to believe that number $3562. If it came to that, he would lose EVERYTHING. It would be completely liquidated. That is, a fund that had billions would disappear. Long before reaching that point, he would have had to look for several options to stay rich. As well as several other funds that became multimillionaires with this latest price hike.

There seems to be a very high gap between 19k and 11k. I hope the market doesn't test this 19k, as there could be a slingshot effect knocking down the rest of the market.

I agree too, I bought 4 btc 3 days in a row and I still think it can go up

quoting myself from another topic as its relavant to this topic and will clarify a few peoples opinons

That sounds a bit like market manipulation, is that even legal? When all the big crypto players work together to force the price down it would mean they liquidate a lot of their positions now. Shouldn't we get some insider news about it? I don't think all the companies could remain quite for such a big a deal. Once the margin call is being triggered it would mean we would see strong buys in the market in an effort to close down the position. Shouldn't the price than rise again sharply? I am no expert on uncollateralised and not sure what options there are to avoid liquidation. Maybe there is a chance to restructure? Like how much further can the price drop, below 20k USD I would expect all the whales to start buying again.

Saylor's margin call is bullshit and FUD that someone made up to scare the market even more.

Remember that for every sell there's a buy and all those coins you panic sell are being bought. Wallet stats show that we hit an all time high for a number of addresses containing more than 10 bitcoin so all those small investors who had a few coins got destroyed in the last few months. Also bitcoin dormant addresses is constantly growing. 



Glassnode watches miners and they were accumulating a lot of coins and not selling when we were at the first correction from 60k last year. In extreme situation when their return would be very low they can wait for a higher price. Most miners don't sell when they get the reward but wait for the best price to maximize profit.

I don't know how or who play this bet game. First, Do Kwon with his challenge over Terraform Labs UST and it collapsed. Then now this Michael Saylor $205 Million Bitcoin-Collateralized Loan for Btc to drop below $21k which happened today. Who are the whales actually? Hedge funds?

Crazy bet indeed but yeah that's a life of trader ... especially a trader that play in a margin trading , you would get this kind moment of falling like right now quite often .. approaching $21K within a couple days only and boom your position going to end liquidated.

And speaking about michael saylor ... i just cant imagined it. Too much money in stake.

Most miners mino for profit. They instantly sell BTC when they get it so I think many will just pause their mining.

I am wondering about those miners who would calculate their earnings to see if mining is profitable or not.
Because they stop mining and buy more bitcoins directly instead. That would create a significant pump in the market and the lat time I heard about it was that the profitable price was around $25k.
All in all, things are really uncertain this time but I think Michael Saylor would have thought this true and won't let any liquidations to occur at his side.
He's a smart person and in fact we all are in it together. We should HODL strong.

The real negative feedback loop is leveraged long AND miners needing to sell to stay afloat.

Damn, that was risky then, but who'd have called an approach to 21k so soon, barely a month after the posting of that price, huh? 50% drop in a month, and using the same asset to borrow against to buy more of the same, that was a virtual double down on a risky position.

It's a crazy bet, probably one I'd have made myself in all honesty, to not see Bitcoin drop below previous ATH. Definitely would have done it in a blink if I had Micro's extra stash lying around.

Precisely.  There is a lot of FUD out there by people who want the price to drop either to buy lower or because they are short it.  It is easy to cherry pick statements and neglect the context to spread it.

It looks like we are going for a massive price crash in Bitcoin but these are the times where smart people start getting Bitcoin in different ways,the fastest one to buy the dip as they say,the slow one which I am doing from years is to mine it and although the difficulty of the network is not down yet with the passing of time it is going to do so thus making old irrelevant ASIC miners relevant again maybe.Whatever direction the price goes even below 21.000 dollars the true believers will hodl and new "true" recruits will surely benefit from such move as in the long run it is inevitable that the price is going to reach new all time highs.

Bitcoin Price is 24,800 now, it is possibe to fall below $21,000 https://xtrading.com/market-data/

Even if Sayler will not be liquidated this should all be a warning to not trade bitcoin with margin. There is way to much unpredictable movement in the market and a lot of extreme events since there are a few early adopters that hold a lot of coins that could crash the market in minutes.

I believe I saw an interview where Saylor addresses this directly. It could probably be found on YouTube. I think he said the actual number where he’d be “margin called” the way that people think (forced selling) is somewhere below $4K. We may get to see exactly what happens and how truthful that is. Crazy how fast the market sentiment changed.

This is starting to look like a very troubling moment for bitcoin, lots of people got into it when it was higher and might be put off forever with this persistent dip taking place. To see such a large hedge fund facing large losses will also see them being a lot suspicious and wary about opening new positions in cryptocurrency in future - or stop them holding it long term in the future.

If the bitcoin price falls below $21,000, this means that it would then fall below 19,800$, which was all time high in 2017. Bitcoin never dumped below the all time high of the previous bull market and if this happens, then it will be bad for the market.

Bitcoin has too much potential, I wonder why people are dumping their coins when there is nothing changed at the fundamental level 

Microstrategy is a business and as a lot of fixed expenses including the interest for the loan. Yes it's easy to say they have a lot of Bitcoin on there balance sheet but the price of Bitcoin itself is killing there business overall. There investors will be feared of the liquidation happened and loss confidence to the company especially when bear market last longer than we expect. You guys is viewing the issue like microstrategy is a normal holder without any obligation to the company itself.

I hope the price will recover anytime soon and it will not hit the mark price because it might fuel a more bearish movement due to FUD.

Not far to go now, looks like that Margin call will be before July.  

https://www.investopedia.com/ask/answers/12/what-happens-cannot-pay-margin-call.asp



If the Margin Call forces MicroStrategy into bankruptcy, all it's shareholders will be wiped out of their ownership of MicroStrategy.
Which includes : https://money.cnn.com/quote/shareholders/shareholders.html?symb=MSTR&subView=institutional

Interesting, it looks like a collapse in the Price of BTC to <$21K could end up tanking a large % of the stock market.  

Just imagine in the process they have so much bitcoins on the balance sheet that it would take only one point in future when bitcoin is reaching ATH and boom their investment for so many years will pass the vibe of holding profitability. That would be crazy Cool to see and let’s not forget this is also creating resistance for ourselves. The more they hold on to their bitcoins the more bitcoin is slower in dropping in terms of USD.

And why would these respectable folks try to do something as obscenely descpicable as that?

I'm sure all of these folks have their own companies or trusts (CZ is obviously Binance CEO), so MicroStrategy can just sue them all for damages if they become dumb enough to act together.

Many traders were probably getting this margin call for mistakenly seeing price will continue to bounce since last week.
Its good that Saylor has lots of BTC in their balance to send  to avoid a big loss. Its not yet there at $21k though. I wouldn't wait to drop another thousands, if I were Saylor I'd be adding more to be sure. We know the volatility of BTC when time comes that people are saving their cash.

The initial alarms must have already been triggered for MicroStrategy by this recent dip. Although I don't think there is a very urgent call following this. MicroStrategy has an ample amount of backup to make sure they avoid a margin call. $21,000 may not be that far but if they will be able to make use of their uncollateralized Bitcoin to defend any possible attempt of the prize to reach $21,000, it could very well absorb further dips below $20,000 which is not highly probable.

Well, a surprising $25k has touched bitcoin. Would they be worried if it actually breaks and stops on $21k? I guess they have it on their book and plans and what they have to act upon on this.

Big shots are taking the spotlight whenever the market's on high or low. That's why it's a big thing to discuss if it's all about these whales that we know. But just as you, I'm worried as well and I guess we have to bear this for a long time or maybe until this year ends.

Personally I'm more worried about the whole crypto situation rather than wondering whether Michael Saylor is going to be liquidated or not. Things are getting worse and worse, and considering the whole social-economical situation in the world this year probably won't get any better. We never went below the previous ATH, which is just above $20k, just like Saylor's margin call, quite a coincidence...

We cannot be very certain if this is as uncomplicated as adding more money to a losing investment because this might also be the fastest way of losing everything assuming that this bear market might occur for a longer amount of time than what is expected or if it would pump to laser eyez to $100k on the next bear market. It is very head shaking that many people in the community find this type of risk taking okay as an investment thesis.

any way, for shits and giggles  (because i dont need to buy more coin, but chose to anyway)..
i just threw in $6k of fiat into bitcoin.
lets call it a bit of spare play money im not concerned with.

why.. well bitcoin is cheap this week, i see no risk at this discount level. ill keep it separate from my main hoard. but ill cash it out when it profits. .. because.. it will
because i am not worried about bitcoin dropping to $21k/btc. so much so i just put my money on it.

I don't believe if this happens to them, firstly Michael Saylor is a long term investment, and as a long term player in the markets, he knew about the possibles risks of this market so he did consider the situation when the price falls down, even as someone who saw 3 market falls in the history of bitcoin I'm not really shocked to see this situation so I expect to see Michael Saylor having no plan for these days when the price is falling down, also even the price 21K cannot be a real red alarm for them because an official company they can add some collateral and even if they need more they will add more collaterals, I think he is even thinking about adding more bitcoins at current prices when the market bloody and everyone is selling.

Fuckin' astute observation, eagle eyes.

The solution of "adding as much collateral as needed so as to prevent loan default" is perfect!  I guess it really just depends on a tiny detail: whether MSTR has enough collateral to keep piling on. 

And that part of mk4's post I bolded doesn't exactly look impossible when the price of bitcoin is sitting at $28,880, which it is as I write this.

That line of thinking sounds so much like "those banks are just too big to fail" or "someone powerful will step in and prevent the stock market from crashing [think October 1929]".  It sounds so logical when it's in your head, but in the real world there's no crash that's too important to stop or anything too big to fail.  Sometimes people or institutions with very deep pockets step in to save the day, but it's rare, and I seriously doubt anyone would help Michael Saylor stay solvent unless it was at a high interest rate...in other words, I'm thinking if push came to shove he'd sell some bitcoin rather than go into further debt or default on his loan(s).

I am not sure if taking a loan would be safe unless you can pay it without the price action taking place. If you take out a loan, and just ignore the bitcoin you buy with it and pay the loan with your salary then it could be fine, there is no problem with that, people grow richer via loans and that has been established for a long time.

But at the same time, we are talking about some people who take it with the hopes that bitcoin would go up before they need to pay it back. If you are taking a loan and hope that the price would go up so you would be easily paying, then it would not be easy because price could go down a lot and it would hurt you.

If the solution was so simply why would Saylor make that kind of declaration? Let's not forget that his average buying price is around $29-30k. He's also running a company and he's already taking a huge risk with bitcoin.

That crash hatshepsut93 was talking about was 10k-4k That wasn't a crash after a pump or an ATH. The price was stable in the 7-9k range for a long time at that point. It was a so called black swan event, a strange scenario. There was no fundemental reason to go that low. It went that low because all trading is done on a fraction of Bitcoins that are in circulation and the price is dictated by a few big exchanges. You manage to crash binance or coinbase and you get a worldwide ripple effect.

that was not a flash crash
that was the ignorance of people not realising that the pump to the ATH was the strange scenario.. of no fundamental reason for the high
the correction after that was the normal expectation after any pump

the 2020-2021 scenario was never meant to be a situation where the price remained at ~$65k
yep i said it so let me make it clear,..
the pump upto $65k was the 'no fundamental reason to hype so high'

..
personally i am bitcoin rich, fiat poor(well not poor, but you get my expression). but even i am in the process this week of gathering as much fiat as i can to buy bitcoin while its cheap (i dont need to as i am bitcoin rich already)
but i know bitcoin is not going to 'bottom out' at extremely lower than this weeks average. we are already at the cheap bottom. there is not much more it can go down by. so im happy to throw more fiat at bitcoin at these deliciously cheap prices

What makes such scenario realistic is the ability of Bitcoin to flash crash into very low levels for no big reason. One of such moments was a 50% crash when quarantine was announced, there was no fundamental reasons for Bitcoin to crash so hard, yet panic and cascading liquidations did their job.

Even retail investors can take a lesson from it - never trade with leverage on a volatile market.

this does not mean they have to sell some coin or pay out some coin. it just means they lock up some more coin in escrow to keep the 'collateral' level at a certain amount

it does not cause the loan to default or a bank to close the contract and demand payment.
(its like 'staking' it. you dont actually lose ownership. u just put it aside in reserve as a promise to do a certain task(repay loan in small drips in fiat long term))

..
imagine you have 3 houses worth say $3m combined. ($1m each)
and you decide you want a 4th home but dont want to waste years saving up $1m of cash to buy it.

so instead. you put one home up as collateral for a mortgage to get $1m in cash instantly to buy the forth home. with terms that you have to slowly over time pay the bank back $1m in cash. or they take your first home.
where the clause is. if the housing market shrinks by half. you will have to put up 2 homes up as collateral..
of course none of this means you lose any homes. they are just sat there still accessible by you to live in.and just pay the monthly repayments in fiat..  but if you dont pay up the fiat cash monthly loan repayments. eventually they might take the homes.
so as long as you know you can afford your monthly repayments. there is no harm

..
micro strategy has the cash. but knows they dont need to throw the whole sum at once. where by they can instead just drip feed the cash later, whilst getting a lump sump of bitcoin upfront in a deal.

they are not needing to touch their bitcoin reserves for years anyway. so they are just sitting there anyway doing nothing.. so why not use them as collateral.., so there is no problem with doing multisig with an escrow/trust/middleman while they settle the loan.. its not like he need to access his coin short term. its not like he cant afford the future monthly payments..
so he gets to buy new bitcoin now while cheap. not lose the bitcoin he already has, and ontop of that not have to shell out millions in fiat instantly from his own pocket in one go.. win win win

..
imagine it this way.
interest rate is 2%.. inflation is 2% (demo numbers)
and you have two choices. work minimum wage, and save, to then buy bitcoin in one lump in 2 years time.. once you have what you hope is enough to buy a whole bitcoin
or
get a loan today buy a whole bitcoin today. and then pay repayments to the exact same amount you would have had to put aside as savings over the next two years.
the answer is obvious.. buy now pay later
..
infact loans were meant to be designed for those that can afford the loan amount but choose 'buy now pay layer' as a economic tool advantage of keeping wealth and accumulating wealth rather than spending every last penny you have in one shot..

loans only go bad if you never have the fiat cash to repay the loan. thus risking the collateral.
micro strategy is not putting his btc collateral at risk because he can make the loan repayments. so its not a problem for him

Yes it briefly was below the level of profitability. It happened twice in the recent years, once in 2018 and once in 2020, although the 2020 crash was mainly due to low liquidity on exchanges. Too much inflow of coins compared to current market orders. The fair value was much higher but the exchange price dropped for a moment which did not affect miners at all, so such an event can happen again, but this would not liquidate Michael Saylor. For him to be in trouble the price would have to stay at that level, not go there because a whale holding 10k BTC suddenly decides to throw the towel.

Anyway, mining profitability isn't a rule that says when we go below it miners will stop mining, because it hasn't happened yet. The production cost is only a guideline, but we've managed to follow it for many years. When the price goes too low miners will stop selling and rather get money from other sources like loans, which decreases the inflow to exchanges and stabilizes the price.

You feel that it's possible we'll repeat 2018 in the lows, but we have not repeated 2017 or 2013 in the highs. What we've experienced was the weakest bull market in history.

There is no such thing as a level above or below profitability.
Mara mines with 2 cents power kWh with s19 and s19pros, Riot in another location at 3.5 with same new gear, some miners in Iceland with cheap rates but with older s15 s17, there are people who still mine with s9 at near-zero cheap energy.  This is not like other mining industries, for example, if half of the oil miners would shut down the rest won't be able to produce the same amount with the same costs.

If miners right now have 200exa, the revenue of 30 million a day, and a cost of 8 million in electricity, assuming half of them won't be able to keep mining you're going to have 100 exa, the revenue of 30 million, and a cost of 4 million in energy, making it twice as profitable, making some miners come back. There is no such thing as below profitability, for that to happen it would mean every single miner would have to mine at a loss, impossible, some will quit before others hit that.

Also, the revenue per TH/s day is still double the one in 2020, and with better efficiency, it will take a price of 15k to reach back that level.

I don't think he needs to lie about this. Surely he finds more collateral, it's not like he is all in on some leveraged trade. Also he has very powerful friends who understand crypto to lend him collateral if it comes to that. You don't need to be smart to make money but no one in his position is so stupid that they would lose everything with a leveraged position.

Why? Musk keeps doing it
But seriously, I don't think he is worried at all. It's not like a TV or movie drama were you get liquidated at the end of the day.
Big money moves differently then small money. For some reason people don't want to hear that. If my brokerage account falls below certain margin levels even I have a couple of days to add funds.
Although I can't give an exact time someplace the size of microstrategy probably has weeks if not months.
They don't want him liquidating and paying off the loan, if they do then they don't get interest on the money anymore....

-Dave

I'm pretty sure he can't just outright lie about stuff like this, right? He handles a public company. Providing fake/misleading information about the company and their holdings will most definitely get him in huge trouble.

According to Saylor, this talk of him being liquidated is just FUD.  You can see in his tweet today he claims that his company can survive a drop below $10K without an issue, and even below $4K he seems to think he'll be able to keep his leveraged trade active.


https://twitter.com/saylor/status/1523996525151539203

Not sure if I totally believe him here, but he certainly has some options before letting his current trade get liquidated.

I'm not an expert on profitability when it comes to mining, but I think you should read the next post by @franky1. Most people involved in BTC mining do it for profit, and the fact is that it is still a very profitable business.



You, like most, are focused only on price, so although you give some reasons for what happened then, you do not take into account what is happening today. I don't know where to start, but first let's consider the consequences of the pandemic (which is still going on), the inflation that is the biggest in the last 40 years, the war in Ukraine, rising interest rates in the US, UK and Australia and the fiasco with this so-called stablecoin.

This is the perfect shit storm that makes a complete mess for most investors who sell for fear of losing even more, and while they panic, others like Buffett are investing $40 billion in less than a month. And you know what, they'll laugh again and be even richer after all this is over.

Yes, it looks like this is the reason Bukele dared to buy 500BTC in the $30,700 area. They announced it on Bukele's twitter. In fact many people believe the $29,000-$30,000 area is the bottom area so many have started buying again. I think microstrategy has thought of additional strategies to avoid margin calls. I think they not only have more BTC in the Spot market but fiat to hold the sell market before reaching their liquidation price. In the end I think this is also a market strategy, to bring the market opinion that the price will remain above the margin call Microstrategy.

I am new in cryptocurrencies compared to the majority of users here, so, please can you kindly remind me, was $3250 below mining profitability in 2018? ATH for that years was 20K USD, bitcoin lost 83% of ATH after 1 year. This makes me think that the risk still exists, especially when the price is so low right now and the probability of someone crazy like Elon Musk will come and ruin the already ruined party. Also, nearly 1 year ago we saw exactly this bitcoin value and I don't like that. Back then there were reasons, Elon Musk's tweets, China's statements but now?

They did their math before taking the loan and knew the risk is minimal. 21k is below mining profitability, below fair value, below 200 week sma that used to always support bitcoin and at the previous ATH which historically has never been breached once a new cycle ath has been reached.
Also, you might look at it and see a grim picture, but we've been here 3 times before. We've spent 3 months at 30k in 2021 and came back there in January 2022. It's not like 30k is the end of the world or something. There's much more room to the upside now since we are 60% down from the ATH.

As for others trying to liquidate him to get his coins, many centralized exchanges are corrupt. You could see how the Chinese were faking volume in 2014 which lead to a strange event where they got raided by the government and suddenly their numbers fell by like 90% because they were being watched and had to stop faking it. There's no stopping guys like CZ if they want to fake a massive dump using their api, without really selling anything.
The only people affected by this will be traders who use these platforms. Bitcoin doesn't care what a bunch of traders do. It was there before Mt Gox and it was there when Gox was gone. It was there before Binance and it's going to outlive it.

Its not that easy as we think though maybe they are not thinking about that option since it will give them double risk if they do that. Maybe they have another balance to use for taking buy backs and for sure they are professionals to know on what will be their next move to do.

Maybe they are creating fear so that they can test if bitcoin would go lower on what price they say so let see what will be the next chapter of market drama in next following months.

It would have to fall below $21k
Then it would have to stay there for an extended period.
MS would then have "X" amount of time to either come up with the money or liquidate.
Not a real big risk considering they can raise funds other ways OR add other BTC purchases to their agreement.

For those of you that don't know that is common in a lot of financial places. You leverage X if it looks bad and you might be forced to liquidate you can add to X.
It's even mentioned in the quote:

-Dave

Maybe they can (which I am not that sure), but will they?!
I think that it's just a little over-pumped drama. Yes, MicroStrategy is exposed. Yes, in theory, the price can go under 21k (iirc in the previous 4-year cycle the low was around 1/7 or the ATH and that would translate to 10k).
But I find even the current 30k (or a little under) very appealing to many and I am also convinced that Michael Saylor has last resort resources he doesn't want to unveil (and he may even buy more as soon as he gets liquidity).

So yeah, it's just newspaper-like ifs and more ifs. I would not be so worried for MicroStrategy. At least not yet.

This or they could go get more loan to safe enter at the current levels. They could even earn huge profits out of it if bitcoin breaks the resistance properly. However, that is another level of risk. Now it’s up to microstrategy plan of action whether to perform such risky bet. I believe since they have taken such huge collateral loans then it won’t be much of issue if they do it again. Nonetheless they have already earned optimum profits from the previous investment. Whales definitely in dilemma at this point as bitcoin is more than 50% down than the initial price. (ATH)

Microstrategy aside, we are in a massive negative feedback loop of untolled thousands of leveraged crypto longs being liquidated while their equity positions are facing the same problems.

This is the scene in the film Margin Call where Jeremy Irons informs everybody that "You don't understand! This!Is!It!"

The key difference is the US Federal Reserve had interest rates back then around 4-5%, a balance sheet of about $50 BILLION, and no meaningful inflation to address. I.e., they had unlimited tools to work with to fix it.

There is nothing that any central bank can do this time. This time, it really IS it.

The crypto market could be even worse than we could have imagined if MicroStrategy got liquidated

MicroStrategy holds crap ton of spot bitcoin on their balance sheets; they could just add more and more collateral so they wouldn't get liquidated. Unless we nuke far far below the $21k threshold, the risks for liquidation are virtually nonexistent.

Exactly! It is very risky especially here in cryptocurrency.
I believe Michael Saylor will be careful in his next decision about their next transaction on Bitcoin whether they will buy or sell. We all know Michale Saylor is a long-term believer in Bitcoin and one of the big players right now on Bitcoin. I am still looking forward what his next move.
I am also curious if those big crypto players especially exchange founders can do those things to liquidate Michael Saylor, I don't think so, what benefit can they gain?

I am quite certain their position on taking a loan against their bitcoin to buy more bitcoin is safe because they have more bitcoin to deposit in their account to avoid a margin call. However, taking leverage by borrowing against a volatile asset to buy the same volatile asset is very risky. The real whales of the cryptospace, Sam Bankman Fried, Changpeng Zhao and Arthur Hayes and the cryptofunds who follow them can manipulate the market to liquidate Michael Saylor.



MicroStrategy’s CFO Phong Le explained in the company’s first-quarter earnings call on Tuesday that if Bitcoin’s price falls below $21,000, or around 50% from current levels, it will be forced to pony up more cryptocurrency to back its $205 million Bitcoin-collateralized loan with Silvergate Bank that was used to buy Bitcoin in the first place.

"We took out the loan at a 25% LTV; the margin call occurs at 50% LTV,” Le said. “So essentially, Bitcoin needs to cut in half, or around $21,000, before we’d have a margin call.”

The CFO noted that MicroStrategy still holds “quite a bit” of uncollateralized Bitcoin that it could use to answer any potential margin call, however.

“As you can see, we mentioned previously we have quite a bit of uncollateralized Bitcoin,” Le said. “So we have more that we could contribute in the case that we have a lot of downward volatility. But again, we're talking about $21,000 before we get to a point where there needs to be more margin or more collateral contributors. So I think we're in a pretty comfortable place where we are right now.”

Read in full https://fortune.com/2022/05/04/michael-saylor-microstrategy-margin-call-bitcoin/