MicroStrategy CEO Michael Saylor says that the enterprise software program agency is contemplating lending out its large Bitcoin (BTC) holdings to earn earnings.
In a 2021 fourth-quarter earnings name, Saylor says MicroStrategy at the moment has over 100,000 Bitcoin that could possibly be deployed to generate yield or for Bitcoin-backed bonds.
“So, 110,000 Bitcoin can be the asset that’s not pledged as collateral that we might probably think about using both to generate yield or to leverage.”
As of January thirty first, MicroStrategy held 125,051 Bitcoin.
Saylor says that the counterparty threat is at the moment excessive because the variety of respected monetary establishments accessible to transact with is restricted.
“I believe that as enthusiasm to commerce and maintain and financial institution digital belongings and Bitcoin particularly grows, there’s going to be a rise within the variety of creditworthy counterparties that we might do enterprise with and growing the choices that we’ve got…
I believe all of those choices that we’ve got, all of them include a threat – a counterparty threat they usually include a theoretical alternative price. After which additionally they include an execution price and an entire set of compliance and different types of disclosure points and technique points that we take into account.”
Based on the MicroStrategy CEO, the involvement of blue-chip monetary establishments within the house would scale back the counterparty threat.
“In a world the place, say, Goldman Sachs and Morgan Stanley and Merrill Lynch, Financial institution of America, and Citigroup, and JPMorgan have an interest and concerned within the house, then I believe the choices that can be accessible to us over time can be better. And the counterparty threat that we must incur can be much less.”
Saylor notes MicroStrategy is the biggest publicly traded company holder of Bitcoin on the planet, and with that comes duty.
“We imagine we’ve got a duty to share what we’ve realized since embarking on this technique to make it simpler for different firms to diversify their stability sheet with this new asset class.”
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