MicroStrategy Chairman Proposes Bitcoin-Backed Loans

After the SEC approved options trading for BlackRock's Bitcoin ETF, discussions about Bitcoin yields reignited.

In a recent podcast, MicroStrategy Chairman Michael Saylor proposed that government-backed U.S. banks could offer USD loans against Bitcoin as collateral, enabling holders to earn yields while retaining their assets.

This strategy positions MicroStrategy, which recently raised $1.01 billion to purchase more Bitcoin, to benefit from increased yields due to its 252,220 BTC holdings.

However, Saifedean Ammous, author of The Bitcoin Standard, expressed skepticism about the sustainability of such lending models, warning they could lead to failures like those of Celsius and BlockFi.

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He noted that these systems lack stability without a lender of last resort and depend heavily on the assumption that the U.S. dollar will remain strong. With ongoing discussions about de-dollarization, the future of the dollar is uncertain.

Custodia Bank’s CEO Caitlin Long suggested that lending Bitcoin at a 1:1 ratio is acceptable, but anything above that indicates insolvency risk. MicroStrategy’s stock has significantly outperformed major tech companies and the S&P 500 thanks to Bitcoin adoption.

Alexander Stefanov