This headline came up in my news feed recently...  Here's [the article](https://fortune.com/2022/05/04/michael-saylor-microstrategy-margin-call-bitcoin/) in full if you want a good example of a biased FUD article, about 400 words long, but with just TWO LINEs which show the headline is extremely misleading FUD. The article outlines how Microstrategy have borrowed around $2 billion to buy some BTC at 25% LTV, with a margin call at 50% - that's the basis on which the headline calculates the $21 000 pay-up figure. The article gives you the impression that $21K BTC would be disastrous for Microstrategy as they'd have to sell around half their BITCOIN holdings, but if you think about it, it's not that bad at all.... MAINLY because there is also this line towards the end.... >The CFO noted that MicroStrategy still holds โquite a bitโ of uncollateralized Bitcoin that it could use to answer any potential margin call, however. Which means they've got quite a lot of scope to avoid that margin call, and of course they can always sell some BEFORE than $21K figure comes to offset any panic. So while the headline isn't outright false - if BTC hits $21K Microstrategy WILL have to sell some BTC, but it might not be the tumble-down crash event the headline kind of suggests. ### The worst kind of FUD...??? I dunno about you but I get the feeling the authors have hit on this figure of $21K as the kind of bottom-target that BTC might reach, and then set up a story of 'if we get there EVERYONE starts to sell' - thus a death-spiral. In reality I think BTC would have to go a lot lower than $21K for Microstrategy and anyone else to sell - so low that it be at the point where no one would be selling! Posted Using [LeoFinance <sup>Beta</sup>](https://leofinance.io/hive-167922/@revise.leo/the-crudest-form-of-misleading-fud-headline-the-fudsters-getting-desperate)
| author | revise.leo |
|---|---|
| permlink | the-crudest-form-of-misleading-fud-headline-the-fudsters-getting-desperate |
| category | hive-167922 |
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I wouldn't say its' FUD, but I doubt MTSR would sell, they are already leveraged but they do have an annual revenue of 500 million so they can keep acquiring and lower their cost basis while servicing their debt, they can also always raise more debt or sell equity if he needs to avoid having to sell. In the worst-case yes, MSTR has a responsibility to their shareholders so yes under 21k could trigger a sell-off for them, but the market can absorb it, as there are funds who have to maintain a percentage allocation lets say 1% of their portfolio, if it dumps they are forced buyers as they need to rebalance To mine 1 bitcoin is still 8000 - 15000 so the margins for miners to sell or turn off is still massive Leveraged traders still need to be flushed out I think at 32 we clear most of them but bitcoin does what it wants, i'm just here to humbly stack
| author | chekohler |
|---|---|
| permlink | re-reviseleo-202259t83124420z |
| category | hive-167922 |
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