Moody's Tells New Hampshire's Bitcoin Bond: 'Cute Idea, But Speculative'

New Hampshire's audacious Bitcoin-backed municipal bond just walked into Moody's office wearing its finest DeFi summer fit — and walked out with a participation trophy instead of a gold star.

The rating agency dropped a provisional Ba2 rating on the project Tuesday, which in Wall Street speak means "we're calling this junk, but fancy junk." Translation: substantial credit risk, retail investors should probably keep their helmets on.

Moody's pointed directly at Bitcoin's notorious volatility as the key reason for the cautious outlook. Their analysis factored in a 72.06% advance rate and a two-day exposure period to calculate the Ba2 rating for Bitcoin collateral.

"The advance rate reflects an assessment of Bitcoin's historical volatility and liquidity," Moody's noted. In other words: we remember the 2022 floor being lava.

To be fair, Bitcoin's volatility has been trending downward over time — though it still dwarfs assets like gold and the Nasdaq-100, as S&P Global recently highlighted. It's like comparing a caffeinated chihuahua to a golden retriever. Both are good boys. One just breaks more things.

The provisional rating means Moody's has done its homework but is waiting on final legal documents before making things official. Next up: pricing the product, though there's no official launch date yet. Classic crypto: everything's coming together, just give us a few more weeks. Or months. Or never.

The New Hampshire Business Finance Authority gave the green light back in November, aiming to become the world's first