Recently, the financial circle has been buzzing with news: New York City Mayor Eric Adams announced the issuance of the world's first municipal Bitcoin bond, BitBond. Simply put, the government is borrowing money for infrastructure and plans to use 10% of the funds to buy Bitcoin! When repaying, not only will you receive 1% interest, but they also promise to share in the gains of Bitcoin. This operation is even harder to understand than those complex DeFi projects, making people exclaim: What is going on here?
Why is he called the 'Bitcoin Mayor'?
In fact, Adams has had a long-standing connection with Bitcoin. Three years ago, he took the lead in receiving his salary in Bitcoin, making a significant presence in the crypto circle. Now, he is going all out:
- Challenging regulation: He openly demands the abolition of New York State's cryptocurrency license, criticizing it for hindering the free flow of Bitcoin, undoubtedly challenging traditional financial regulation.
- Envisioning crypto: He established a digital asset committee and declared that he wants New York to become the center of the crypto universe, with grand ambitions.
- Riding on Trump's coattails: Taking advantage of Trump's declaration of Bitcoin as digital gold, he quickly launched Bitcoin bonds, which can be seen as 'keeping up with the trends.'
Global trend-following, already showing signs.
The actions of the New York City Mayor are not an isolated incident. In March, Trump requested the Treasury to establish a 'Bitcoin Strategic Reserve.' Some think tanks estimate that similar bonds could save $700 billion in interest over ten years. The Japanese listed company Metaplanet has already issued bonds to raise $24.8 million, only to rush and buy over 5,000 Bitcoins. Suddenly, it seems the whole world has fallen into a frenzy over these Bitcoin bonds.
Risk warning bells ringing.
- Government profits: Even if Bitcoin's price drops to zero, the government can still save a significant amount of money with low-interest bonds; if Bitcoin rises, they can take a cut and remain secure.
- Retail investors gamble hard: But for retail investors, it's not that easy. Estimates indicate that Bitcoin's annual growth rate needs to exceed 53% to outperform regular government bonds. This means investors have to bear huge risks; if Bitcoin's price falls, they could lose everything.
- Federal Reserve alarmed: From a macro perspective, this bond essentially undermines the central bank's printing power, making the Federal Reserve uneasy. The stability of the traditional financial system is facing unprecedented challenges.
When traditional finance puts on the Bitcoin cloak, is it a ticket to a new world, or just a repackaged old tool? This is a question worth pondering.
- Supporters: Some believe that with state backing and Bitcoin's potential for appreciation, this is a win-win situation.
- Opponents: However, others argue that 1% interest, combined with Bitcoin's enormous volatility, makes it more practical to hoard coins themselves.
The debate over Bitcoin bonds has already exploded in the comments section. Would you buy such Bitcoin bonds? Feel free to leave your opinion in the comments and join the discussion!
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