“Not quite ready” — MicroStrategy CEO Michael Saylor said that traditional financial markets aren’t ready for bonds backed by Bitcoin.
MicroStrategy CEO and Bitcoin permabull, michael Saylor believes that ancient money markets aren’t quite prepared for Bitcoin-backed bonds.
Saylor told Bloomberg on Tuesday, that he’d like to see the day return wherever Bitcoin-backed bonds are sold like mortgage-backed securities, however warned that, “the market isn't quite prepared for that right now. the next best plan was a term loan from a major bank.”
The remarks come two days when MicroStrategy’s (MSTR) Bitcoin-specific subsidiary MacroStrategy, proclaimed that it had taken out a $205 million Bitcoin-collateralized loan to buy even additional Bitcoin. This loan was distinctive, because it marked MicroStrategy’s initial time borrowing against its own Bitcoin reserves — that are presently valued at approximately $6 billion — to shop for more of the cryptocurrency.
Saylor’s comments additionally follow El Salvador’s recent call to defer the supply of its $1 billion dollar Bitcoin-backed “Volcano Bond” on March 23rd. in keeping with El Salvador’s finance minister Alejandro Zelaya, the choice to delay the bond was because of general money uncertainty within the world market driven by conflict in Ukraine.
In a potential warning to Salvador, Saylor said that the country’s Volcano Bond was somewhat additional risky than his company’s Bitcoin-collateralized loan,
“That’s a hybrid sovereign debt instrument as opposed to a pure Bitcoin-treasury play. That has its own credit risk and has nothing to do with the Bitcoin risk itself entirely.”
Saylor more that he remains extraordinarily optimistic on the long potential for Bitcoin-based bonds, going as so much to mention that it might be a decent plan for cities like new york to use Bitcoin as a debt instrument.
“New York can issue $2 billion of debt and buy $2 billion worth of Bitcoin — the Bitcoin is yielding 50% or more, the debt costs 2% or less.”
( Tom Mitchelhill, Cointelegraph, 2022 )