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202 sats \ 1 reply \ @denlillaapan 17 Jun \ on: What do people mean when they say Bitcoin bond? bitcoin

"who are these entities who "cannot" buy bitcoin and why can't they?""who are these entities who "cannot" buy bitcoin and why can't they?"

I wonder this too. Yes, in the short term there's plenty of regulations around which fund or pool of capital can or cannot buy what thing, but those things can shift and with bitcoin in the world will shift very soon.

in 2021 we have a government issuing bonds with a promise to buy bitcoin with some of the money and share some of any bitcoin price appreciation with their bond holders. However, what's weird about this is that it's a bad deal: you would make more just buying bitcoin.
In 2025, Bitcoin bonds mean a US dollar loan to a government so it can buy bitcoin...or just price exposure to bitcoin for people who can't otherwise get it.

Yes, correct.

As an investor you can usually just mimic the bitcoin share and achieve a superior, risk-free return: i.e., if govt bit bonds are 90% debt and 10% bitcoin, you can just take your $100 of funds and split it 90% in higher-yielding gov debt and 10% bitcoin.

So no, they are self-defeating ridiculous instruments.

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100 sats \ 0 replies \ @Scoresby OP 17 Jun

And implicit in the BPI proposal is that they need a heck of a lot of buyers. Not only does the gov't need to issue more debt (because they are buying bitcoin with 10% of the money they raise), but also we just need a lot of loan money -- I'm very doubtful floating such a bond would be anything but a failure. There will be mocking of bitcoin.

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