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It was a way to get around bond regulations, the bond is a wrapper around Bitcoin. It’s similar to how some companies buy MSTR because they are not allowed to b
by xiphias2 4y ago
It was a way to get around bond regulations, the bond is a wrapper around Bitcoin. It’s similar to how some companies buy MSTR because they are not allowed to buy Bitcoin directly, but want some exposure.
- riffraff 4y agobut these are junk bonds, it's not like there's pension funds that are going to buy them. MSTR as a bitcoin proxy made sense at a time when you could not easily own bitcoins, but there are direct ways to do it now anyway (GBTC, BITO). I am ignorant and I just don't know, but which regulation would forbid you from buying a bitcoin ETF but allow you to buy junk el salvador bonds?
- adament 4y agoA pension fund might very well be allowed to buy junk bonds since it is a well-known if risky instrument whereas bitcoin ETFs are a newfangled weird instrument that is probably not covered by their guidelines. I mean allowed in the sense that the investment guidelines set by the board allow it. Source: I work at a pension fund where I think we are in precisely this situation.
- arcticbull 4y agoYou are correct that at the time of announcement, if you had believed in Bitcoin and El Salvador (for some reason) it would have been advantageous to simply buy - separately - Salvadoran sovereign debt on the capital markets and Bitcoin on the spot markets.