French firm Capital B is creating a bitcoin-backed credit instrument for the European market, aiming to offer double-digit yields with under-double-digit volatility. The product will be modeled after similar instruments from Strategy and Strive, using the company's Bitcoin holdings as collateral.
This development signals a growing trend of traditional finance-like instruments being built on top of cryptocurrency assets, potentially offering new avenues for yield generation and investment in the European market, while also highlighting the associated risks.
Paris-listed bitcoin treasury firm Capital B is developing a new credit instrument for the European market, according to board director Alexandre Laizet. Speaking at BTC Prague, Laizet stated the product will be modeled after Strategy's STRC and Strive's SATA, aiming to offer double-digit yields with volatility under double digits, utilizing the company's Bitcoin holdings as collateral.
Laizet expressed confidence in delivering such returns due to Bitcoin's appreciation, noting that a Bitcoin treasury company's balance sheet already holds assets growing significantly annually, unlike traditional finance obligations. He acknowledged risks such as Bitcoin devaluation and counterparty risk but emphasized working with regulated banks and having expert teams.
Capital B, listed on Euronext Growth Paris, aims to accumulate 1% of Bitcoin's total supply by 2033 and holds 3,139 BTC currently. The company has observed a tenfold increase in investor interest in digital credit instruments compared to the previous year.