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

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.