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Is MicroStrategy Considering Lending Their Bitcoin To Generate Yield? WHY?

Say it isn’t so! Apparently, MicroStrategy ‘s Michael Saylor is considering lending the company’s Bitcoin. On a company stage, that makes all of the sense on the earth. As a Bitcoiner, it doesn’t. So, if MicroStrategy decides to do it, the world will know the place Saylor’s loyalties lie. And, this could shock nobody. Saylor has been dropping hints that he intends to do that for some time now. 

Related Reading | Michael Saylor Says Bitcoin Is The Oxygen Mask That Will Save Investors

This all occurred, “Thursday on the company’s investor day call with shareholders,” Bloomberg informs.

What Did Saylor Say In MicroStrategy ‘s Call?

His precise phrases had been:

“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.”

So, they’re nonetheless fascinated with it and there are a number of choices on the desk. And, even when they select to lend the Bitcoin for yield, there are infinite potentialities there. What does “a trustworthy counterparty” imply? Is it only a firm that may assure yield, custody, and return of their BTC? Or are they speaking about an organization that’ll use that Bitcoin in an moral method and never brief their very own funding?

That’s one of many essential causes hardcore Bitcoiners are towards lending. People who borrow BTC normally use it to brief Bitcoin. They guess towards Bitcoin and drive the market down. Is that in the perfect curiosity of MicroStrategy? Will they partake within the exercise for the yield alone? Maybe they received’t. Maybe they’ll discover a use case by which the lender doesn’t use their Bitcoin for nefarious functions. 

The different purpose Bitcoiners are towards lending doesn’t have an effect on MicroStrategy. Hardcore Bitcoiners don’t lend their BTC as a result of they don’t wish to lose custody. Self-custody is paramount in Bitcoin tradition, and the yield isn’t well worth the danger of surrendering your BTCs to a different entity. 

If the rumors are true, Coinbase is already the custodian of MicroStrategy ’s Bitcoin. Make of that what you’ll.

BTCUSD price chart for 12/17/2021 - TradingView

BTC price chart for 12/17/2021 on EXMO | Source: BTC/USD on TradingView.com

MicroStrategy Considers A Bond Option

There’s a second quote within the Bloomberg report that factors to but an alternative choice. This one is likely to be extra akin to what’s occurring on the earth, however, what do we all know? In response to a query, Saylor reportedly stated:

“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,” he stated, including that he would strategy this sort of bond providing if it was accretive to shareholders.” 

In different phrases, MicroStrategy will see how the El Salvador Bitcoin Volcano Bond does, earlier than committing. The eyes of the world are on that funding car, as they’ve been on El Salvador because the nation introduced the Bitcoin Law. In any case, it needs to be famous that MicroStrategy isn’t any stranger to bonds. Their “junk bond deal from June (…) currently trades around par, or 100 cents on the dollar, according to Trace bond-pricing data.”

Related Reading | Michael Saylor Brings The Thunder To Venezuelan Bitcoin-Only Podcast

Bonus: Bitcoin As Digital Property

Last however not least, why did we are saying that Michael Saylor has been dropping hints concerning the lending of their Bitcoin? Well, in a latest “What Bitcoin Did” episode he talked about Bitcoin being digital property. Perfect. He in contrast it to a resort. Ok. In the true world, all inns have not less than 30% empty rooms. That sounds about proper. If that resort might be within the digital world, the proprietor might hire all the rooms on a regular basis, as a result of the demand comes from in all places on the earth. Where are you going with this, Saylor? In truth, he stated, we might hire these rooms each second of each day. WHAT?! This man is certainly contemplating lending MicroStrategy ‘s Bitcoin.

Featured Image by James Coleman on Unsplash - Charts by TradingView

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