Fundamentals on Nostr: Where or when might it make sense to loan out Bitcoin for yield? There is a world ...
Where or when might it make sense to loan out Bitcoin for yield?
There is a world where companies with Bitcoin Treasuries realize that they can deploy them to the purposes of lowering their fixed USD costs. Examples would include a mining company that has fixed power costs in USD, or a Bitcoin company that pays its employees itheir salaries in USD
In this world, a company would be permitted to show investors that it can deploy its Treasury on a regular basis (say, sell BTC every 2 weeks to cover the fixed USD costs). The company would show investors a strategy that would imply a more profitable operation as opposed to just a capital gain on its Treasury.
A company that must faithfully sell BTC every 2 weeks in order to reflect better operating earnings in its financial statements might find itself not wanting to sell their BTC for a period of time, like when the price of BTC sharply dips. In this scenario, these companies might very much want to borrow BTC to meet their operating demands.
Much much more of this to come, but check out @RockPaperBitcoin podcast to hear this idea being developed in real time.
There is a world where companies with Bitcoin Treasuries realize that they can deploy them to the purposes of lowering their fixed USD costs. Examples would include a mining company that has fixed power costs in USD, or a Bitcoin company that pays its employees itheir salaries in USD
In this world, a company would be permitted to show investors that it can deploy its Treasury on a regular basis (say, sell BTC every 2 weeks to cover the fixed USD costs). The company would show investors a strategy that would imply a more profitable operation as opposed to just a capital gain on its Treasury.
A company that must faithfully sell BTC every 2 weeks in order to reflect better operating earnings in its financial statements might find itself not wanting to sell their BTC for a period of time, like when the price of BTC sharply dips. In this scenario, these companies might very much want to borrow BTC to meet their operating demands.
Much much more of this to come, but check out @RockPaperBitcoin podcast to hear this idea being developed in real time.