https://x.com/Excellion/status/1898505424867037626
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Discussion
Why would any investor buy a bitcoin-backed bond? Those who believe in bitcoin should objectively just buy / earn bitcoin. Those who don’t believe in bitcoin think that bitcoin-backed bonds are stupid.
Serious question. That we should discuss as a community.
I know some Bitcoin influencers have made it their reputation and it their livelihood to jet-set the world, advocating this concept of better yielding, less risky debt but I think they’re barking up the wrong tree. Bitcoin makes debt markets - at least the ones we have today - obsolete.
The entire concept of bitcoin bonds is stupid. Just buy bitcoin.
A number of reasons:
- less volatility
- fixed income
- no technical knowledge needed
- mandate to buy bonds
- better performance than traditional bonds
I’m sure there are many more.
For any “meaningful” duration I strongly disagree with 1-3 … and bitcoin makes 5 obsolete because bonds won’t be generating 30%+ annual coupon rates. Bitcoin *replaces* bonds.
The only useful “bitcoin bond” duration would be less than 4-years to manage “short-term” volatility. And most bond buyers doing any volume are not max bidding short-duration paper. And those with a mandate to “buy bonds” aren’t touching bitcoin-backed bonds right now and by the time they get their mandates, bitcoin is already gonna have disrupted bond markets.
I’m just telling you how the world operates not how it should.
In hindsight, suddenly is the only way this can happen