Moody’s has, for the first time in its history, evaluated municipal bonds backed by Bitcoin. The planned issuance will be carried out through the New Hampshire Business Finance Authority. The bonds received a preliminary Ba2 rating. The announcement was published on March 31.
One of the key features of the deal is its overcollateralization. The Bitcoin pledged as collateral is worth approximately 1.6 times the amount of the debt. Moody’s also viewed positively the mandatory redemption mechanism, which would be triggered if the value of the collateral falls below 1.4x the bond amount.
Even so, the agency assigned the issuance a speculative, or non-investment-grade, rating. The main reason is Bitcoin’s high volatility, as it remains an asset subject to significant price swings. Because of this, the bonds are unlikely to be accessible to a broad range of institutional investors, many of whom are restricted from buying securities with ratings at this level.
Still, the very fact that such an instrument has now received a rating can already be seen as an important step for the market. If Bitcoin’s volatility continues to decline over time and the level of collateralization increases further, similar issuances could eventually qualify for higher credit ratings.
Issuance Structure and CleanSpark’s Role
The total size of the bond issuance is $100 million. It is divided into two series, both maturing in 2029. One of the series includes a so-called upside participation feature: if the price of Bitcoin rises by maturity, bondholders will be entitled to receive 15% of the price appreciation.
Interest payments on the bonds will be funded through partial liquidation of the collateral. However, the final yield at which the bonds will be priced has not yet been disclosed.
Although the issuance is being conducted through a New Hampshire entity, the actual borrower is CleanSpark, while the transaction itself was structured by Wave Digital Assets, a firm specializing in digital assets. This means that neither state funds nor taxpayer money are being used in this structure.
Why These Bonds Are Being Issued
The capital raised is intended to be used to purchase Bitcoin. In essence, CleanSpark is using a debt instrument to increase its exposure to BTC, betting on further price appreciation. This approach is similar to the strategy used by companies that expand their crypto reserves through external financing. The Bitcoin serving as collateral for the bonds will be held in custody by BitGo.
Why This Matters for the Market
Moody’s decision to rate bonds backed by Bitcoin can be seen as a landmark development for both the crypto market and the broader financial sector. It suggests that major players in traditional financial infrastructure are gradually beginning to view digital assets not as an exception, but as a potential form of collateral alongside more conventional types of security.
As more companies continue to hold crypto on their balance sheets, the ability to borrow against such assets could eventually give them additional practical value. If this first transaction proves successful, other rating agencies may also begin evaluating similar instruments.
For now, however, the market is only at the very beginning of this process. The Ba2 rating remains relatively low, so the key question going forward is what level of overcollateralization, price stability, and market maturity would one day allow Bitcoin-backed bonds to move closer to investment-grade status.