MicroStrategy Weighs Lending Out Its Bitcoin Haul for Yield

Michael Saylor discussed the possibility of MicroStrategy lending Bitcoin on a Thursday company call. Read the full article by Chris Williams “Neither this post nor any other on cryptofal.com should be taken as financial advice. It is not.”

Microstrategy is one of the leading companies when it comes to adopting digital currencies and blockchain most through the acquisition of Bitcoin on every market dip. The company itself is holding a staggering 122,478 BTC which is worth roughly $5.6 Trillion. So what does a company do with all of this if BTC instead of just sitting on it?

One thing they can do is loan it to a third party which is something CEO Michael Saylor is thinking about doing. The benefit of this would be that the company would make more passive income by loaning out its assets to a trusted third-party borrower. Gemini does this through its Gemini earn product where it allows its investors to loan out their crypto for a percentage return.

“There may be opportunities to either put a mortgage against it and generate long-term debt under favorable circumstances, which we could leverage up against the Bitcoin, or we think that we could lend it to a trustworthy counterparty.” The future of BTC being used as collateral for certain things like mortgages is still a little far out. We may see early in 2022 in Canada how this product will work out as Ledn is already working on it.

Lending cryptocurrency has become very popular as the ability to do so becomes more and more accessible. The issue before was that you would have to go through shady third-party companies. Now you can do so through heavily regulated and audited companies like Gemini, Genesis, and others.