The Financial markets are actually unprepared for the Bonds that backed with Bitcoin. MicroStrategy’s Saylor is most vocal and renowned advocate of companies. It is adding to the Bitcoin and cryptocurrency to the balance sheets.
I would wish to see a day when people sell Bonds that backed with Bitcoin such as securities that backed with mortgage. It was also announce by the software maker. It was taking additional loan for buying the digital asset such as Bitcoin etc. The market is also ready for this situations now. Best and great idea was the term loan from key bank.
Volcano Bonds Backed by Bitcoin
This may also serve as the warning to the El Salvador. He is planning to sell almost $1 billion of the volcano bonds which will get back by Bitcoin. Though the propose offering also is the talk of crypto industry as it was initially propose during last year.
There is also much of the talk about Bitcoin bond of El Salvador. This is the hybrid instrument of sovereign debt as opposed to the play of pure treasury. This has their own credit risk & it has nothing to do through Bitcoin risk.
However, $205 million of loan, that will get back by holdings of MicroStrategy. It was best possible course for the shareholders subsequent to exploring the slew of the financing options. They consist of issuing the Bitcoin-backed bonds with tapping DeFi and tools decentralized finance and loaning their stash of the digital assets.
If it about the balance sheet at almost 4% interest, where probably do such deal. But when it is the hedge fund and the operation doesn’t get 100 times of the balance-sheet. There is possibly theoretical counterparty risk that is offsetting the nominal yield.
