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MicroStrategy’s Bitcoin-Backed Loan Risks Margin Call Amid Fall

  • Coin tests prices that may trigger a need for more collateral
  • Firm used the $205 million loan in March to buy more tokens
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WATCH: Bitcoin dropped 10% Tuesday before paring much of the slide. Ether and Avalanche also trimmed losses.Source: Bloomberg
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MicroStrategy Inc. may need to post additional collateral for a Bitcoin-backed loan as the price of the world’s largest cryptocurrency tests a key price level of $21,000 flagged by the company.

The software firm controlled by Bitcoin advocate Michael Saylor had used its vast Bitcoin holdings to secure a $205 million loan in March to buy even more cryptocurrency. But as the value of that collateral initially worth around $820 million falls to about half that, the company may need to provide more capital to back the loan.