Michael Saylor, CEO of business intelligence firm MicroStrategy, believes that the financial market is not ready to have a Bitcoin-backed bond. Meanwhile, El Salvador has postponed the launch of its BTC-backed volcano bonds.
Now is Not the Time for a Bitcoin-Backed Bond
In a recent interview with Bloomberg, the MicroStrategy CEO, while not generally opposed to Bitcoin-backed bonds, believes that now is not the time to issue such a project.
“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.” – He said.
The CEO’s comment comes as El Salvador is looking to launch a $1 billion Bitcoin bond. Speaking about the Central American country’s Bitcoin-backed volcano bonds, the MicroStrategy chief said:
“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.”
As previously reported by CryptoPotato, El Salvador was gearing up to launch its 10-year Bitcoin Bond. The intended proceeds of $1 billion will be divided in two, with half going into BTC investment, and the rest will be used to develop the much-talked-about “Bitcoin City.”
However, earlier in March, the launch date was postponed, with El Salvador’s Finance Minister Alejandro Zelaya, citing unfavorable market conditions as the reason for the delay.
Saylor Says $205 Million Loan Was the Best Financing Option
MicroStrategy’s subsidiary MacroStrategy recently secured a $205 million loan from Silvergate Bank, a division of Silvergate Capital Corporation, collateralized by bitcoin holdings. As part of the agreement, MacroStrategy will use the loan to purchase BTC, pay fees interest, and take care of expenses related to the loan.
Saylor, meanwhile, said that getting the loan was the best decision for the company’s shareholders. The MicroStrategy CEO said that various financial options such as Bitcoin-backed bond issuance, loaning out BTC, and leveraging decentralized finance (DeFi) tools were considered.
Saylor is one of the most prominent Bitcoin proponents in the industry. The CEO’s business intelligence company has been amassing BTC since 2020 and is currently the biggest corporate holder of bitcoin, with over 125,000 BTC in its stash.