Crypto diehards suffered a brutal month, and there are few bigger backers than the Bitcoin whale himself, Michael Saylor.
His software company, MicroStrategy, has effectively become little more than a levered play on rising Bitcoin adoption rates through events like Fidelity’s 401(k) launch, a “shot heard round the world,” according to Saylor this month.
Since his titular core business is unable to produce enough cash to satisfy his appetite for the cryptocurrency, the CEO has borrowed heavily to finance his buy-and-hold strategy.
Lately that included the first-ever Bitcoin-backed term loan for $205 million, which resulted in 19,466 Bitcoin from its own holdings set aside to meet the minimum requirement of $410 million security.
With leverage, however, comes the risk of margin calls. So when news emerged earlier this month that it might be forced to post further collateral if the price drops below $21,000, investors were spooked, fearing a whale might be forced to liquidate part of his holdings.
Saylor, after all, has made it crystal clear his company is not the equivalent of a crypto prop desk earning trading income from short-term fluctuations in Bitcoin’s price that could prove to be a systemic risk for the crypto community.
“[MicroStrategy] has 115,109 Bitcoin that it can pledge,” he tweeted, referring to his Q1 presentation and assuring fellow HODL (“hold on for dear life”) believers on Tuesday there were other ways of meeting obligations without a fire sale.
Thanks to reserves of 129,218 Bitcoin currently worth $2.9 billion on its balance sheet and roughly $4.1 billion at the going market price, MicroStrategy is the largest public holder of the cryptocurrency.
Saylor is positioning his company to investors as little more than an exchange-traded fund, with two key differences.
“Our goal will be to offer them the same Bitcoin holding but without charging that [management] fee, and to use intelligent leverage from time to time when the opportunity presents itself,” Saylor told investors last week.
“If you think it would be a reasonable idea to borrow money at 1.8% interest to buy Bitcoin, then MicroStrategy looks like a rational company to invest in.”
Over the past month, however, the father of all cryptocurrencies has seen a quarter of its value wiped out thanks to an inflation-fighting Federal Reserve raising demand for its fiat rival.
Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.