MicroStrategy CEO Michael Saylor, considered one of the most influential advocates of Bitcoin ( BTC ), believes that financial markets are not yet ready for Bitcoin borrowing.
Accordingly, as Saylor explained to Bloomberg on Tuesday , while he would love to see bitcoin-backed bonds trade as naturally as mortgage bonds, at the moment he sees "the market not yet ready for it."
Saylor's comments come two days after MacroStrategy, the bitcoin-focused subsidiary of parent company MicroStrategy, raised a $205 million loan collateralized with bitcoin. The new capital was in turn also invested in BTC . Even for crypto-friendly MicroStrategy, this deal is a first, as for the first time, the firm is borrowing on its own bitcoin reserves, which are currently believed to be worth an estimated $6 billion, to buy even more bitcoin.
The MicroStrategy boss is also taking up the latest decision by the government of El Salvador, because the Central American country has initially postponed the issuance of its USD 1 billion Bitcoin bond, which was planned for March 23. As Finance Minister Alejandro Zelaya explains, the postponement is a result of the uncertain global economic situation, fueled by the ongoing conflict in Ukraine.
Saylor specifically warns that El Salvador's "Volcano Bonds" are significantly more risky than his company's Bitcoin-backed borrowing:
"In our case, it's a type of hybrid credit instrument, and not a bitcoin treasury bond, which has its own credit risk that doesn't depend solely on bitcoin's risk of default."
Nevertheless, the economist sees a lot of potential in Bitcoin bonds in the future, even seeing them as a good lending tool for cities like New York:
“New York could borrow $2 billion and use it to buy $2 billion of bitcoin. Currently, bitcoin yields an interest yield of 50% or more, while lending rates are 2% or less.”
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