re: Official CryptoTalk Thread

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I think they only have 25% pledged as collateral so they have ability to add, but is that predetermined or assumed to be accepted as collateral? In other words, can the bank decide to call it if they choose?

Very interesting position for that bank to be in if so. They essentially have the power to crash bitcoin to $7-8k I would think. Might be against their best interest, but could also pay off long term.

Should be interesting to see what happens

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I don't know what MicroStrategy agreed to with their financial institutions, but there are written covenants that you can't violate and MicroStrategy should be good if they stay within their contracted terms and covenants. There would be huge moral hazard if banks just decided to call loans arbitrarily. Having said that, a business partner and I got buggered by three separate banks and lines of credit because of the financial crisis in '08. Three separate letters from different banks all stated that we violated covenants (we didn't). It was a much smaller amount but we couldn't replace the LOCs in that environment. If you owe the bank $3mm you have a problem, if you owe the bank $500mm, the bank has a problem.