Michael Saylor, CEO of MicroStrategy and a long-time supporter of Bitcoin (BTC), argues that existing financial markets aren’t nearly ready for Bitcoin-backed bonds.

Saylor told Bloomberg on Tuesday that he’d love to see the day when Bitcoin-backed bonds are marketed in the same way that mortgage-backed securities are, but that the market isn’t quite ready for that yet. A term loan from a large bank was the next best option.

The comments came only two days after MicroStrategy’s Bitcoin-specific company MacroStrategy launched a $205 million BTC-collateralized loan to acquire even more Bitcoin. This was a one-of-a-kind loan since it was MicroStrategy’s first time borrowing against its own Bitcoin holdings — which are presently worth at over $6 billion — to purchase more of the cryptocurrency.

Saylor’s remarks come on the heels of El Salvador’s recent decision to postpone the March 23 issuing of its $1 billion BTC-backed “Volcano Bond.” The decision to postpone the bond, according to El Salvador’s Finance Minister Alejandro Zelaya, was made owing to overall financial instability in the worldwide market caused by the situation in Ukraine.

Saylor, in a possible warning to El Salvador, stated that the country’s Volcano Bond was somewhat riskier than his company’s Bitcoin-collateralized loan. He described it as a hybrid sovereign debt instrument rather than a straight Bitcoin-treasury move. This has its own credit risk and has nothing to do with the Bitcoin risk at all.

Saylor went on to state that he is quite enthusiastic on the long-term prospects of Bitcoin-based bonds, even going so far as to suggest that cities such as New York employ Bitcoin as a debt instrument.

MicroStrategy has collected a large 125,051 BTC since its original $250 million BTC investment in August 2020, equating to $5.5 billion at the current price of $44,547. MicroStrategy conducted a number of independent BTC acquisitions with cash on hand as well as revenues from the issuance of convertible senior notes in private offerings to institutional investors.

Saylor’s activities progressively converted MicroStrategy into a somewhat leveraged Bitcoin holdings firm, with shares strongly tied with Bitcoin’s price.

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