SINGAPORE (Reuters) – Bitcoin neared a price level on Tuesday that could force software firm MicroStrategy Inc to stake more tokens against a bitcoin-backed loan or trigger selling of some of its vast holdings, setting fragile cryptocurrency markets on edge.
Bitcoin fell below that level to $20,816.36 on Tuesday before steadying near $23,000. Typically a margin call is met by providing more capital or liquidating the loan’s collateral.
It was unclear if the price moves had any consequences for MicroStrategy, or if the firm already provided more bitcoin or cash to secure the loan. The company did not immediately respond to an emailed request for comment outside business hours.
Silvergate did not immediately respond to a request for comment also emailed outside business hours.
MicroStrategy‘s Le in May said the firm had 95,643 “unencumbered bitcoin” that it could use as extra collateral.
“We could contribute more bitcoin to the collateral package, so … we don’t get into a situation of a margin call,” he had said.
In March, MicroStrategy said it intended to use the loan’s proceeds to buy more bitcoin, among other purposes.
(Reporting by Tom Westbrook.)