MicroStrategy denies it received a margin call against its bitcoin-backed loan, report says

Software company MicroStrategy has not received a margin call against its loan from crypto-focused bank Silvergate, Reuters reported on Wednesday.

According to a report on Wednesday, MicroStrategy has not received a margin call against the loan it took in March.

A margin call is when an investor has to commit more money to avoid losses on a trade.

CNBC reported on Tuesday that investors were worried that MicroStrategy would have to liquidate some of its holdings if faced with a margin call.

CNBC requested comment from MicroStrategy before the report was published.

In this week's big selloff, the world's largestcryptocurrencies briefly fell below $21,000. Since the start of the year, MicroStrategy's shares have plummeted.

At 12:14 a.m., the price of the digital currency was $21,184.99. On Wednesday

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Line chart with 159 data points.The chart has 1 X axis displaying Time. Range: 2021-12-31 00:00:00 to 2022-06-14 00:00:00.The chart has 1 Y axis displaying values. Range: 20000 to 50000.End of interactive chart.

MicroStrategy borrowed $205 million in a three-year loan from Silvergate to buy more bitcoins.

According to a company filing, MicroStrategy held over 130,000 bitcoins at an average price of $30,700. The company is one of the biggest investors of the digital currency.

The chief financial officer of MicroStrategy warned in May that a margin call could be triggered if the price of the digital currency dropped below $21,000.

MicroStrategy said in an email that it had not received a margin call against its Silvergate loan.

MicroStrategy said that they can always contribute additional bitcoins to maintain the required loan-to- value ratio. A loan-to-value ratio is a measure of how risky a loan is.

MicroStrategy CEO Michael Saylor said in June that the company has enough money to cover its loan needs. He said that before more surety would be required, the prices of the digital currency would need to fall to $3,500.

The company structured its balance sheet so that it could remain invested, according to Saylor.

CNBC requested comment from MicroStrategy, but the company did not reply immediately.

Ryan Browne worked for CNBC.