Moody’s prices Bitcoin at a 28% haircut — and sets the trigger for forced selling
Moody's has assigned a rating to a bond backed by Bitcoin, effectively pricing it at a 28% discount and establishing conditions for potential forced selling.Summary
Moody's recent assignment of a Ba2 rating to $100 million in revenue bonds secured by Bitcoin collateral marks a significant step in Bitcoin's integration into traditional finance. This establishes a borrowing value and liquidation threshold for BTC, transforming it from a simple asset into usable financial collateral. The structure sets a 72.06% credit value for each dollar of Bitcoin, with a trigger for action at a 1.40x collateral coverage ratio, implying a potential 28% 'haircut' from current prices. This is the first instance of Bitcoin being formally translated into credit terms understood by public markets, opening new liquidity sources but also introducing the risk of coordinated selling during price drops. Similar moves by S&P and Coinbase demonstrate a growing trend of utilizing Bitcoin as collateral, though each transaction has different terms and risk profiles. While currently a small segment of the overall municipal bond market, this development represents a crucial step in Bitcoin's journey towards broader financial acceptance and could lead to tighter pricing and wider adoption as more data becomes available.
(Source：CryptoSlate)