Strategy’s Michael Saylor affirms overcollateralization amid Bitcoin price drop concerns

Strategy’s version, according to Michael Saylor, is not that story. The executive chairman of Strategy, formerly known as MicroStrategy, has publicly stated that even a collapse in Bitcoin’s price to $5,000 would leave the company’s collateralization position intact. The reason, he argues, is straightforward: most of that capital was never borrowed in the first place. Why overcollateralization matters here Strategy has issued Bitcoin-backed preferred securities with reported overcollateralization rates as high as 6x. In plain terms, for every dollar of obligation attached to those instruments, there are roughly six dollars of Bitcoin sitting behind it. At a $5,000 price level, which would represent a drawdown of more than 90% from recent highs, most leveraged Bitcoin players would have been wiped out long before reaching that floor. Strategy has structured its exposure primarily through equity and preferred stock raises, not through debt that carries margin-call mechanics. The numbers behind the conviction Strategy currently holds approximately 842,138 BTC, making it the largest corporate holder of Bitcoin on the planet. The average cost basis sits near $75,000 per BTC, which means...