Replying to Avatar BoomTown

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.
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DRE 10mo ago

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.

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BoomTown 10mo ago

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.

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DRE 10mo ago

I’m just telling you how the world operates not how it should.