Michael Saylor Advocates Bitcoin-Backed Loans Amidst Skepticism from The Bitcoin Standard’s Saifedean Ammous
The post Michael Saylor Advocates Bitcoin-Backed Loans Amidst Skepticism from The Bitcoin Standard’s Saifedean Ammous appeared on BitcoinEthereumNews.com.
The recent approval by the SEC of options trading on the BlackRock Bitcoin ETF has reignited discussions around Bitcoin yields. Michael Saylor, Chairman of MicroStrategy, suggested innovative ways to generate yields by leveraging Bitcoin holdings. Contrasting this, Saifedean Ammous, author of The Bitcoin Standard, raised concerns about the sustainability of such financial models. Explore the latest debate between Michael Saylor and Saifedean Ammous on the viability of Bitcoin-backed loans and the associated risks. Michael Saylor’s Proposal for Bitcoin-Backed Loans In a recent podcast, Michael Saylor proposed that major US banks, deemed too big to fail and supported by the government, could offer USD loans against Bitcoin (BTC) holdings. According to Saylor, this system allows BTC holders not only to generate yield without liquidating their BTC but also to benefit from BTC’s price appreciation while assuming the credit risk of established banks like JPMorgan, Citi, or Bank of America. This model could potentially pave the way for BTC holders to monetize their assets without selling, thereby capitalizing on both yield and appreciation. Criticism and Risks Highlighted by Saifedean Ammous Saifedean Ammous, the author of The Bitcoin Standard, voiced his skepticism about this model. Drawing parallels with the unsuccessful ventures of Celsius and BlockFi, Ammous cautioned that Bitcoin yield models could also face collapse without a lender of last resort. He expressed concerns that such systems are inherently risky and could lead to significant financial instability. This skepticism is rooted in the belief that relying heavily on USD stability may not be wise, especially with the global financial landscape evolving towards alternatives like BRICS payment systems. The Debate on USD Dependence and De-Dollarization Saifedean Ammous emphasized that MicroStrategy’s model is predicated on the assumption that the USD will remain robust indefinitely. However, there is a growing discourse around de-dollarization and the potential…
Filed under: News - @ September 24, 2024 7:26 am