MicroStrategy CEO and Bitcoin 

BTC

$17,450

 permabull Michael Saylor believes that traditional financial markets aren’t quite ready for Bitcoin-backed bonds. 

Saylor told Bloomberg on Tuesday that he’d love to see the day come where Bitcoin-backed bonds are sold like mortgage-backed securities but warned that “the market is not quite ready for that right now. The next best idea was a term loan from a major bank.”

The remarks come two days after MicroStrategy’s Bitcoin-specific subsidiary MacroStrategy announced that it had taken out a $205 million BTC-collateralized loan to purchase even more Bitcoin. This loan was unique, as it marked MicroStrategy’s first time borrowing against its own Bitcoin reserves — which are currently valued at approximately $6 billion — to buy more of the cryptocurrency.

Saylor’s comments also follow El Salvador’s recent decision to postpone the issuance of its $1 billion BTC-backed “Volcano Bond” on March 23. According to El Salvador’s Finance Minister Alejandro Zelaya, the decision to delay the bond was due to general financial uncertainty in the global market driven by conflict in Ukraine.

In a potential warning to El Salvador, Saylor said that the country’s Volcano Bond was somewhat riskier than his company’s Bitcoin-collateralized loan,

“That’s a hybrid sovereign debt instrument as opposed to a pure Bitcoin-treasury play. That has its own credit risk and has nothing to do with the Bitcoin risk itself entirely.”

Saylor added that he remains extremely bullish on the long-term potential for Bitcoin-based bonds, going as far to say that it would be a good idea for cities like New York to use Bitcoin as a debt instrument.

“New York can issue $2 billion of debt and buy $2 billion worth of Bitcoin — the Bitcoin is yielding 50% or more, the debt costs 2% or less.”

Related: MicroStrategy CEO won’t sell $5B BTC stash despite crypto winter

Since its initial $250-million BTC investment in August 2020, MicroStrategy has now amassed a substantial 125,051 BTC — which at the current price of $44,547 equates to $5.5 billion. MicroStrategy has made a series of separate BTC purchases using the company’s cash on hand as well as the proceeds of sales of convertible senior notes in private offerings to institutional buyers.

Saylor’s actions have gradually transformed MicroStrategy into a partly leveraged Bitcoin holdings company, with shares closely correlated with the price of Bitcoin.