A Different Tradeoff with Bitcoin Lending? With Andrew Hohns of Newmarket Capital | SLP630

Andrew Hohns discusses the maturation of Bitcoin collateralized finance, the unique characteristics that make Bitcoin an exceptional form of collateral, and the innovative financing model of Battery Finance.

In this conversation, Andrew also discusses the complexities of capital markets, the challenges posed by inflation for credit investors, and the potential of Bitcoin as a transformative tool in structured finance. 

He emphasizes the importance of understanding investor needs, managing risks associated with Bitcoin-backed financing, and the global implications of integrating Bitcoin into traditional financial structures. Hohns advocates for a long-term perspective in financial planning and highlights the evolving landscape of finance influenced by digital assets.

Takeaways

🔸Bitcoin collateralized finance is becoming more mature.

🔸Short-term borrowing facilities dominate the current market.

🔸High interest rates pose challenges for long-term financing.

🔸Bitcoin's finite nature makes it a powerful asset.

🔸Bitcoin's versatility allows for various applications.

🔸The future of Bitcoin borrowing depends on institutional involvement.

🔸Battery Finance offers a unique financing model.

🔸Borrowers can re-denominate equity into Bitcoin.

🔸Impact investing can be enhanced with Bitcoin.

🔸Lenders have new options with Bitcoin as collateral. Capital markets cater to diverse investor needs and time horizons.

🔸Credit investments are essential for institutions needing income.

🔸Inflation poses significant challenges for credit investors today.

🔸Real returns must be considered to understand investment performance.

🔸Bitcoin can provide a hedge against inflation for credit investors.

🔸Global adoption of Bitcoin is crucial for its integration into finance.

🔸Risk management is vital when incorporating Bitcoin into financing.

🔸Time preferences influence financial decision-making and investment strategies.

🔸Structured finance can benefit from the unique characteristics of Bitcoin.

🔸The future of finance will increasingly involve digital assets like Bitcoin.

Timestamps:

(00:00) - Intro

(00:55) - How does the market perceive Bitcoin?

(06:48) - Versatility of Bitcoin

(13:35) - Why is Bitcoin exceptional collateral?

(15:05) - Sponsors

(16:54) - Why have Bitcoin borrowing rates been high?

(19:37) - What is Battery Finance and how does it work?

(26:50) - Who are the target customers of Battery Finance?

(32:01) - Sponsors

(33:05) - Lender perspectives in Bitcoin financing

(35:54) - The challenge of inflation for credit investors

(42:32) - Global Perspectives on Bitcoin

(47:39) - How to manage risks in Bitcoin-backed financing?

(52:29) - Repealing SAB121 and implications of banks custodying Bitcoin

(58:05) - The future of Bitcoin in structured finance

Links: 

• https://www.newmarketcapital.com/about-us/ 

Sponsors:

• Bold Bitcoin

• CoinKite.com (code LIVERA)

Stephan Livera links:

• Follow me on X: @stephanlivera

• Subscribe to the podcast

• Subscribe to Substack