ABOUT BITCOIN TREASURY BILLS
What is Bitcoin Treasury Bills?
Bitcoin treasury bills is an investment option created by Satoshi Nakamoto for the free world, the investment is backed by bitcoin and Blockchain technology with a maturity of one year or less.
Bitcoin treasury bills bids usually starts at $100-$10000 per bid, these securities are widely regarded as low risk and very secure investments. Bitcoin treasury bills is sold at www.bitcointreasurybills.
In 2010 Satoshi Nakamoto announced that there will be a bitcoin treasury bills totally different from the fiat currency treasury bills backed by the federal government. His goal was to make bitcoin treasury bills the safest investment in the world. However, seeing bitcoin as a world investment, unlike the traditional treasury bills, high yield investment, over the counter monetary discount and other numerous schemes.
Bitcoin treasury bills discount rates are determined by bitcoin price volatility, market capitalization, bitcoin mining productivity margin and more, what this entails is that bitcoin is traded everyday against market markers.
For example, If Madisson made a purchase of $1000 BT-Bills at a discount rate of 6% per month during a stagnant movement of bitcoin price fixed at $15000 per bitcoin, and Richard made a purchase of same $1000 BT-Bills at a discount rate of 10% per month during an upward movement of bitcoin from $15000 per bitcoin to $16000.
Factors that Affect Bitcoin Treasury Bill Prices
The price of bitcoin treasury bills and the return for investors may be affected by various factors such as macroeconomic conditions, investor risk tolerance, and specific supply and demand conditions for bitcoin treasury bills.
The maturity period of a bitcoin treasury bills affects its price. For example, a one-year BT-bill comes with a higher rate of return than a three-month BT-bill. The explanation for this is that longer maturities mean additional risk for investors. For example, a $1,000 BT-bill may be sold for $700 for a three-month T-bill, $600 for a six-month T-bill, and $400 for a twelve-month BT-bill. Investors demand a higher rate of return to compensate them for tying up their money for a longer period of time.
An investor’s risk tolerance levels also affect the price of a BT-bill. When the price of bitcoin is skyrocketing and other debt securities are offering a higher return, BT-bills are less attractive and will, therefore, be priced lower. However, when the markets and the economy are volatile, and other debt securities are considered riskier, BT-bills command a higher price for their “safe haven” quality
Can I Sell Before Maturity?
Yes, you can sell BT- Bills before maturity. However, the price at which you sell depends on the prevailing interest rate. For instance, a $100 Face Value BT-Bills maybe selling for less or more depending on the prevailing interest rate as at the time of the sale as yield expectation influences interest rates. If your Face value is trading at a higher price, it means you can sell your BT-Bills at a profit as such your $100 can sell for $120 or more. If your Face value is trading at a lower price, it means you can sell your BT-Bills at a loss as such your $100 can sell for $80 or less.
What Are The Other Benefits Of Bitcoin Treasury Bills?
1: Bitcoin treasury bills is a risk free investment as it carries the guarantee of the cryptocurrency itself.
2: BT-Bills are highly liquid instruments and can be used as collateral
Liquidity-active secondary market for ease of entry and exit (though at a cost)
Interest earned is exempt from any form of tax.
3: It is a good source of steady stream of income
4: BT-Bills are good investments for people who wish to save.
5: BT-Bills can also be used as collateral for mortgage and auto-loans in the US.
Investors Can Bid In Two Different Ways for Bitcoin Treasury Bills:
Non-competitive Bids: This type of bid is akin to a market order. The investor agrees to accept the discount rate determined at by BT-bills. Investors who take this bid are guaranteed to have their orders filled.
Cooperate Bidding :
With this type of bid, the investors bid on a privacy coin which is projected to go up in price at a set tenor, the privacy coin is limited and the starting bid price is determined by investors interest,
It is important to note that the private coin is limited and once the number set out for bid is exhausted, the bid is closed till maturity. Investors who bid below the set rate of the coin will have their order rejected.This type of bid cannot be placed through Treasury Direct. You must use a bank or broker.
In a single bid, investors can buy up to $5 million in BT-Bills private coin.