Is MicroStrategy Margin Call 'Much Ado About Nothing'? Why Michael Saylor Plans To Keep Stacking Bitcoin

Zinger Key Points
  • The key is to hold Bitcoin for more than four years, Saylor says.
  • "This is an ideal entry point to get into this thing."

Bitcoin BTC/USD has been cut in half since the start of the year as it continues to trade lower alongside traditional markets. One Bitcoin bull says the world's oldest and largest cryptocurrency is offering investors an incredible entry point.

Time To Buy: Bitcoin has only touched its four-year simple moving average a couple of times in history and it's hovering around its SMA right now, MicroStrategy Inc MSTR CEO Michael Saylor said Wednesday on CNBC's "Squawk On The Street."

"Those have always been great buying opportunities. Bitcoin is on sale," Saylor said.

Bitcoin's SMA over a four-year basis is approximately $21,685, according to the Microstrategy CEO. The key is to hold Bitcoin for more than four years, he said, noting that nobody has ever lost money over a four-year period.

"If your time horizon is one month, it looks like a volatile risk asset, but if your time horizon is 10 years, it looks like a risk-off store of value asset," Saylor said. "This is an ideal entry point to get into this thing."

Margin Call? There has been much speculation about MicroStrategy facing a potential Bitcoin margin call, but Saylor said the company is well-positioned. 

"If the market traded down by a factor of 10, we've got cash and we generate cash flow so the margin call thing is much ado about nothing," Saylor said.

"We feel like we have a fortress balance sheet, we're comfortable and the margin loan is well managed." 

Related Link: Ring Ring! Here's Where Bitcoin's Price Must Hold For Michael Saylor To Avoid A Margin Call

Saylor maintained his extremely bullish outlook on Bitcoin, suggesting that another bull run is only a matter of time. 

"Ninety-eight percent of the world doesn't understand the concept of a digital scarcity yet, but when they do, they're going to think it's a magical thing," Saylor said.

He told CNBC that MicroStrategy plans to buy more Bitcoin as the company generates excess cash, and of course, hold it long term. 

$BTC Price Action: Bitcoin was down 4.71% over a 24-hour period at $21,314 Wednesday morning. 

Photo: Ricardo Goncalves from Pixabay.

Posted In: CNBCMichael SaylorCryptocurrencyLong IdeasSmall CapMarketsMediaTrading Ideas

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