While the MicroStrategy CEO is not opposed to Bitcoin-backed bonds in general, he believes that now is not the right time to issue one, according to a recent interview with Bloomberg.
“I’d love to see a day where people eventually sell Bitcoin-backed bonds like mortgage-backed securities.”
“The market is not quite ready for that right now. The next best idea was a term loan from a major bank.”
El Salvador is planning to issue a $1 billion Bitcoin bond, according to the CEO. The MicroStrategy CEO remarked of the Central American country’s Bitcoin-backed volcanic bonds:
“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.”
The best financing option, according to Saylor, was a $205 million loan.
El Salvador was getting ready to issue a 10-year Bitcoin bond. The $1 billion in expected proceeds will be split in half, with half going to BTC investments and the other half going to the much-discussed “Bitcoin City.”
The debut date was postponed earlier in March, with El Salvador’s Finance Minister Alejandro Zelaya claiming poor market conditions as the cause for the postponement.
MacroStrategy, a subsidiary of MicroStrategy, has received a $205 million loan from Silvergate Bank, a part of Silvergate Capital Corporation, with bitcoin assets as collateral. MacroStrategy will utilize the loan to buy BTC, pay interest, and cover loan expenses, according to the terms of the arrangement.
Meanwhile, Saylor stated that taking out the loan was the greatest option for the company’s stockholders. Various financial possibilities, including the issue of Bitcoin-backed bonds, the lending of BTC, and the use of decentralized finance (DeFi) tools, were investigated, according to the MicroStrategy CEO.
Saylor is a proponent of Bitcoin who is well-known in the field. Since 2020, the CEO’s business intelligence firm has been gathering BTC and is now the largest corporate holder of the cryptocurrency, with over 125,000 BTC in its vault.
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