A Bitcoin margin call. If the world’s leading cryptocurrency drops below $21,000, Michael Saylor’s MicroStrategy will be forced to pay up

Michael Saylor is perhaps one of the most fervent supporters of Bitcoin on the planet—and that’s saying something, given the almost cultlike community behind the world’s leading cryptocurrency.

Saylor, an MIT graduate and the cofounder and CEO of the business intelligence firm MicroStrategy, has become a hero to the Bitcoin faithful ever since his company began stockpiling the cryptocurrency in August 2020.

The CEO has gone so far as to call Bitcoin “freedom,” and “the most universally desirable property in space and time.” And at Bitcoin 2022 Miami—the largest Bitcoin event worldwide—Saylor was met by thousands of cheering fans as he instructed the crowd to never sell their crypto.

Saylor’s Bitcoin appetite has grown so much that the CEO is now borrowing millions from banks to add more of the cryptocurrency to MicroStrategy’s balance sheet. The collateral? That’s right, more Bitcoin.

MicroStrategy added another $215 million worth of Bitcoin at an average purchase price of $44,645 per coin in the first quarter, SEC filings show, bringing its total holdings to 129,218 Bitcoins acquired for $3.97 billion, or $30,700 per coin.

At Bitcoin’s $39,800 price as of 4 p.m. ET on Wednesday, the company’s holdings were worth over $5.1 billion. The company’s market cap, on the other hand, is roughly $4 billion.

MicroStrategy has said it has no plans to sell its Bitcoin, and thus far, its buy-and-hold strategy has been profitable. But with Bitcoin’s price down roughly 35% in the past six months, that may be changing.

As a result of its status as a quasi-Bitcoin ETF, and a pile of over $2.3 billion in long-term debt, MicroStrategy’s stock is down over 20% in the past month and nearly 65% from its February 2021 all-time high of over $1,000 per share.

And if Bitcoin’s value continues to fall, Saylor and company could face one hell of a margin call.

The margin call from hell

MicroStrategy’s CFO Phong Le explained in the company’s first-quarter earnings call on Tuesday that if Bitcoin’s price falls below $21,000, or around 50% from current levels, it will be forced to pony up more cryptocurrency to back its $205 million Bitcoin-collateralized loan with Silvergate Bank that was used to buy Bitcoin in the first place.

“We took out the loan at a 25% LTV; the margin call occurs at 50% LTV,” Le said. “So essentially, Bitcoin needs to cut in half, or around $21,000, before we’d have a margin call.”

The CFO noted that MicroStrategy still holds “quite a bit” of uncollateralized Bitcoin that it could use to answer any potential margin call, however.

“As you can see, we mentioned previously we have quite a bit of uncollateralized Bitcoin,” Le said. “So we have more that we could contribute in the case that we have a lot of downward volatility. But again, we’re talking about $21,000 before we get to a point where there needs to be more margin or more collateral contributors. So I think we’re in a pretty comfortable place where we are right now.”

Still, taking out a loan collateralized by Bitcoin to buy more Bitcoin is a risky game. If the world’s leading cryptocurrency falls and a margin call goes through, MicroStrategy would be put in a tough spot. MicroStrategy did not respond to Fortune’s request for comment.

Impervious API: Your portal to the p2p internet (Bitcoin Layer 3)

Impervious API is a programmatic layer that sits on top of the Bitcoin Lightning Network, i.e. “Layer 3.” Developers can leverage the Impervious API to easily build secure p2p data transmissions and payments into their applications and services.

1. Truly peer-to-peer (like the Internet was meant to be)

2. Censorship and surveillance resistant

3. Default encrypted

4. Payments built in

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Layer 3:

  • Censorship resistant VPN
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  • A decentralized command and control system for your network of machines
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How much do you know about Bitcoin?

Bitcoin Info > Bitcoin Quiz


1) There are 100 cents in 1 US Dollar.

How many satoshi are there in 1 Bitcoin?


2) What is the maximum number of Bitcoin that can ever exist on the Bitcoin network?


3) Which statement about Bitcoin Energy use is is untrue:

  • Bitcoin uses as much energy as a small country like Norway.
  • Bitcoin uses about as much energy as the cruise industry.
  • Bitcoin uses about half as much energy as the gold industry.
  • Bitcoin uses about half as much energy as the banking industry.
  • In 2017, Newsweek projected that Bitcoin would consume all the world’s energy by 2020.
  • Bitcoin today uses about 0.1% of world energy.


4) What is triple entry accounting?


5) How much money was the creator of Bitcoin paid for his invention?


6) Who has permission to view Bitcoin’s transaction log?


7) What is the halving cycle?


8) What is the block difficulty adjustment?


9) Name two Bitcoin layer 2 applications.


10) What is the difference between a Bitcoin hot wallet and a cold wallet?


11) Name a Bitcoin Multisig Wallet.


12) How does the rate of Bitcoin money laundering compare with money laundering in the traditional  Banking system?


13) How does the cost of making payments with Bitcoin compare with credit card transactions?


14) How much do banks charge immigrants in fees to transfer money to their families in Central America compared with Bitcoin lightning transfers?


15) Approximately how much disk space does the current Bitcoin blockchain use (in GB)?




  • Given Amazon.com’s stock lost over 50% of its value 3 times and over 90% an additional time, when would it have made sense to invest in Amazon.com?



Yanis Varoufakis was Greece’s finance minister during the Greek economic crisis. In 2012, he explored utilizing a blockchain-based system to help manage some of the crisis. Varoufakis has spoken critically about bitcoin publicly on many occasions, he understands the power of bitcoin but feels its economics is dangerous.

During a Twitter thread on Bitcoiners engaging with people outside of our usual circles, I suggested Varoufakis, who, as a Keynesian, has clearly seen value in some aspects of Bitcoin. Rather poetically he retweeted the thread.

I wanted to write a short letter bringing him up to speed on some of the changes that have happened in Bitcoin, and whether the functionality now available will impact his opinions.

Dear Mr Varoufakis,

For a long time Bitcoin has pricked your interest, but after analysis of its economics you have been left with serious and very valid concerns, such as its deflationary issuance, and its ability to disarm governments from using money to stimulate the economy.

“powerful tendency to underestimate the ill-effects of deflation on a social economy”


“there can be no de-politicised currency capable of ‘powering’ an advanced, industrial society.”


As a great supporter of your work, I hope to address some of those concerns. I know you explored implementing a blockchain-centric solution during the Greek crisis, and that you are no stranger to the technology of Bitcoin or its tenets, so forgive me if I cover a few things you already know.

One of the computer-science solutions that makes Bitcoin possible is that it is free and open-source software, a sort of cooperative for software development and a direct response to the privatization of computer science during the early 1980s. Suggestions for improvements to the Bitcoin protocol are developed publicly. Anyone can contribute to Bitcoin, but for their contribution to be successful they must go through the arduous task of proving scientifically why a change is necessary, and trying to find consensus amongst Bitcoin’s users. Changes are accepted by the network through the software the users choose to run, and in this way the users of Bitcoin decide how it is defined.

Bitcoin is always in flux, forever changing, so our judgements about Bitcoin must also change.

It is important to note a number of impressive advancements that have happened over the past few years, namely the second-layer solutions pegged to Bitcoin made possible by a malleability fix in 2017. The most popular of these second-layer solutions is the Lightning Network, which is based on a concept first suggested by Satoshi Nakamoto, that a transaction can be securely held open for a period of time, and updated, before being committed to the blockchain. These “held” transactions (payment channels) can have value move within them quickly and easily. The Lightning Network is a bunch of payment channels all networked together. I can send value to you securely, privately, very quickly and for almost no cost through the network without having to have a direct channel to you, a bit like people passing information between degrees of separation.

Pegged protocols such as the Lightning Network mean on-chain Bitcoin transactions can be used for much more than just moving value from one person to another. The underlying blockchain should be seen as an irrefutable timeline, to which truths can be pegged. This extends beyond value transfer, and many further commodity uses for the world’s most digitally-secure and scarce data are being explored.

While we can question the ability of Bitcoin’s deflationary curve to make a good system of money, its ability to bootstrap a community of users, businesses, investors and those willing to secure the network (miners) has proven successful.

The question for Bitcoin in the future will be, do the users want to keep its deflationary curve or update the protocol to a more natively usable rate of inflation, or do they want that functionality outsourced to a pegged second-layer protocol?

Changing the Bitcoin protocol would involve that scientific and democratic method of seeking consensus from its users, which could prove impossible in this scenario, but that doesn’t mean the functionality can not be achieved through a second layer.

For example, your “fiscal money” suggestion of debt tokens for use by insolvent companies, as a second layer could leverage the security of Bitcoin’s blockchain, but not be limited by its many design or throughput limitations. By including a technology called “atomic swaps,” different fiscal monies could even be interoperable with each other. Utilizing the Lightning Network alone, society could create complete openness and transparency for public spending and, at the same time, privacy for its citizens. The Lightning Network’s capacity for transactions per second is practically limitless, and far outcompetes networks like Visa, so now suddenly money streaming for services is made possible. Even VAT could be collected at the point of sale, and users could configure precisely where those taxes go, streamlining tax collection from merchants and empowering tax as a democratic tool.

Another second layer to Bitcoin that has had some traction is the Liquid Network, a federated, much faster additional blockchain. The Liquid Network is currently being used as medium of account for a number of bitcoin exchanges, who are each nodes in the federation and can validate transactions and vote on changes such as inflation, not unlike Keynes’ bancor. The Liquid Network’s federation model would translate well to a representative democracy, with nodes geographically spread across regions. The Lightning Network can also run on top of the Liquid Network, if super fast/cheap throughput is needed for everyday transactions.

Yes, Bitcoin is an apolitical money, in that not one country can control it. Rather, control is in the hands of all the users within those countries via a very public agora, but a politicized money can also exist as a second layer, and one resistant to cronyism.

Boom/bust buffering such as fair weather surplus recycling is possible with Bitcoin and all of its protocols, using multiple signatures to securely lock up rainy day surplus, or second layers for stimulus such as inflation and issuing debt tokens. Bitcoin is a direct response to cronyism, and although it enriched a few lucky enough to be there early on, more bitcoin does not equal more power over the ability to produce bitcoin, unlike the current neo-liberal apparatus of wealth disparity. Disparity in bitcoin wealth allocation continues to decrease, as those made rich by the bootstrap effect burn through their funds. There is no reason why this trend would not continue.

Bitcoin is a commons regulated by the community as a whole, and like any healthy commons is being nurtured and developed by its users, who in turn have a duty of care over it. Bitcoin’s functionality has no bound, and its usefulness is only limited by the efforts we the users put into it.

Hopefully I have addressed some of your concerns, and that for you, Bitcoin can move from a catalyst of despair, to one of hope.

All the best,

Ben Arc

The Expansive Nature of Bitcoin with Troy Cross

In a Nutshell: Satoshi Nakomoto is possibly the greatest philosopher of the modern era. The stitching together of the various threads that comprise Bitcoin reflect a deep understanding of math, psychology, human nature, politics, coding, and money. Troy and I discuss philosophical angles related to Bitcoin including what Plato and Aristotle would have thought of Bitcoin, how to influence skeptics of Bitcoin, a new proposal to incentivize green mining, and why Troy does not regret paying 5 bitcoin for a pair of Alpaca socks. Guest: Troy Cross, Professor of Philosophy and Humanities at Reed College and a self-described “Philosopher, Environmentalist, and Bitcoiner.”