Microstrategy could lend their BTC of the company and generate more yields according to the latest reports from Michael Saylors’ company as we read further in our bitcoin news.
On a corporate, this decision makes a lot of sense but what kind of implications will this decision have? The lending should surprise no one because Saylor dropped many hints that he intends to do it for a while and all of this information came from the company’s investor day call with the shareholders a few days ago. He said:
“There may be opportunities to either put a mortgage against it and generate long-term debt under favorable circumstances, which we could leverage up against the Bitcoin, or we think that we could lend it to a trustworthy counterparty. That could become a good source of income for us, or we could develop it with some kind of interesting applications.
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Microstrategy could lend BTC and it is still thinking about it and there are few options on the table yet. Even if they choose to lend the BTC for yield there are some infinite possibilities there and what does a “trustworthy counterparty” actually mean? It is just a company that can guarantee custody and yield and return their BTC or are they talking about a company that will use the BTC in an ethical way and not shorts their investments. This is one of the reasons that strong BTC supporters are against lending. People that borrow BTC use it to short BTC And they bet against the asset to bring the market down.
The other reason Bitcoinsers are against lending is that they don’t want to lose custody. Self-Custody is paramount in BTC culture and the yield is not worth the risk of surrendering the BTC to another entity. There’s a second quote in the reports that point to another option and this could be more akin to what is currently happening in the crypto space, however, Saylor said:
“I think that we’re still a little bit too soon to say whether there’s a good Bitcoin-backed bond market, but I look forward to exploring that in the future.”
Microstrategy will see how El Salvador Bitcoin Volcano Bond does before committing and some see it as an investment vehicle but it should be noted that the company is not a stranger to bonds. Saylor talked about Bitcoin being digital property and compared it to a hotel even because hotels have 30% of empty rooms usually. So if that hotel is in the digital world, the owner could rent the rooms all of the time because the demand is coming from across the world. He said he would rent these rooms every second of the day so make of that what you will.
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