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MicroStrategy and El Salvador respond to Bitcoin holdings' floating losses, Salvadoran Finance Minister: Not selling is not considered a loss.

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MicroStrategy and El Salvador respond to Bitcoin holdings

The cryptocurrency market is collapsing, with Bitcoin on the verge of breaking through the psychological barrier and 2017's high of $20,000. Apart from concerns over Celsius temporarily suspending withdrawals citing "extreme market conditions," the market is also closely watching the severe losses of MicroStrategy and El Salvador's moves. Both parties responded to the public on June 14th, with the Salvadoran Finance Minister indicating, "We haven't sold, so we haven't lost."

Tesla, MicroStrategy, and El Salvador Facing Losses

According to previous reports, the statistics are as follows:

  • Tesla -28.7%: Holding 43,200 BTC with an average cost of approximately $31,250, resulting in an estimated loss of $360 million.
  • MicroStrategy -27.5%: Holding 129,218 BTC with an average cost of approximately $30,700, resulting in an estimated loss of $1.009 billion.
  • El Salvador -50.5%: Holding 2,301 BTC with an average cost of approximately $44,993, resulting in an estimated loss of $52.23 million.

MicroStrategy

MicroStrategy's most recent purchase of BTC was in April this year. In May, CFO Andrew Kang firmly stated that they would not sell any BTC. In addition to facing losses in their Bitcoin holdings, MicroStrategy's stock price has also dropped by 23% since June, falling to levels last seen in November 2020. Moreover, suspicions arose in the crypto community on June 13th regarding a Bitcoin transaction circulating on Twitter, questioning whether MicroStrategy was planning to sell some of its Bitcoin.

MSTR Daily Chart

Regarding recent liquidation rumors, external media, Wu Blockchain, claimed to have received a response from Michael Saylor:

The company's future actions will be disclosed through SEC filings. The relevant content has already been clarified in a tweet on May 10th: "MicroStrategy has a $205 million revolving credit facility that requires $410 million in collateral. The company has 115,000 Bitcoins to pledge. If the price of BTC falls below $3,562, the company may need some additional collateral."

The mentioned loan was a $205 million crypto-backed loan provided in March this year by the crypto bank Silvergate's leverage program, with MicroStrategy at the time using $820 million worth of Bitcoin as collateral.

MicroStrategy CEO Michael Saylor stated after the market crash on June 13th, "We believe in Bitcoin," and changed his profile picture to one with Bitcoin laser eyes the next day.

El Salvador

El Salvador's President Nayib Bukele, who has repeatedly emphasized buying the dip, has not made any statements regarding Bitcoin since the crash. However, Salvadoran Finance Minister Alejandro Zelaya dismissed the risks posed by Bitcoin losses during a press conference. According to reports from Deutsche Welle, Zelaya stated:

Many people have been shocked by our Bitcoin strategy recently. I have said many times, there is no such thing as a $40 million loss because we have not sold any Bitcoin. When the outside world claims that El Salvador is facing high financial risks due to Bitcoin, it just makes me laugh. This is a very ignorant and superficial analysis. Even $40 million is less than 0.5% of our total national budget, so the financial risk it poses is very low.