MicroStrategy’s Michael Saylor has recently shared his thoughts around bitcoin-backed bonds which have been gaining popularity after El Salvador announced that it would be launching the first one. Saylor who is a staunch advocate of BTC explained where he saw the market right now in terms of bitcoin bonds and whether or not the crypto space was ready to have one.
Market Not Ready For Bitcoin-Backed Bonds
Saylor shared some interesting views about bitcoin-backed bonds in a recent interview. Despite being a strong proponent of BTC, the MicroStrategy CEO does not believe that the crypto space was ready to have a bitcoin-backed bond, which he told Bloomberg.
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This does not mean that the CEO is against having BTC-backed bonds, however. It is more a matter of timing. “I’d love to see a day where people eventually sell BTC-backed bonds like mortgage-backed securities,” Saylor said. “The market is not quite ready for that right now. The next best idea was a term loan from a major bank.”
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There is yet to be an official BTC-backed bond released but this is no longer a distant dream as El Salvador is set to make history when it issues the first one. Saylor also mentions the El Salvador bond during his interview but explained that “That’s a hybrid sovereign debt instrument as opposed to a pure Bitcoin-treasury play.” Adding that it “has its own credit risk and has nothing to do with the Bitcoin risk itself entirely.”
What About MicroStrategy?
News recently broke that MicroStrategy had secured a loan of $204 million to deepen its bitcoin play. Saylor also touched on this in his interview. For MicroStrategy, bitcoin has become its major play over the year, becoming the largest BTC holder of any publicly listed company at the same time. However, the firm does not seem anywhere close to done even after amassing more than 122K BTC.
“If it was JPMorgan and it was their balance sheet at 4% interest, I’d probably do that deal,” Saylor said. “But if a hedge fund or operation doesn’t have 100 times my balance sheet, then there’s probably theoretical counterparty risk offsetting nominal yield.”
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So even though Saylor does not readily support the issuance of a bitcoin-backed bond anytime soon, it doesn’t mean that he is backing away from any BTC plays. MicroStrategy itself has been looking into more ways to leverage its own massive stash of BTC.
“At every scale, anybody can readily use Bitcoin as their fulcrum and leverage is plentifully available to every corporation in the world right now. Municipalities could do it,” the CEO explained.
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