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Federal Reserve Gets Bitcoin Exposure Through MicroStrategy Junk Bonds

ETF Exchange Traded FundFederal Reserve Gets Bitcoin Exposure Through MicroStrategy Junk Bonds AnTyJune 10, 2021The US central bank may not be crypto-friendly, calling digital currencies very speculative and volatile, but it surely has some Bitcoin exposure although indirectly.The Federal Reserve is reportedly an early adopter of the first Bitcoin-linked junk bond.Last year, the Fed bought…

ETF Exchange Traded Fund

Federal Reserve Gets Bitcoin Exposure Through MicroStrategy Junk Bonds

The US central bank may not be crypto-friendly, calling electronic monies very speculative and volatile, but it surely has some Bitcoin exposure although indirectly.

The Federal Reserve is reportedly an early adopter of their very first Bitcoin-linked junk bond.

Last year, the Fed purchased bond exchange-traded funds to get things moving following the pandemic froze credit markets.

This bond ETF purchase made the Fed the fourth-biggest owner, as of late March, of this SPDR Bloomberg Barclays High Yield Bond ETF, reported Bloomberg.

0. 01% of this ETF, which is commonly known by its JNK ticker, is dedicated to the junk bonds MicroStrategy Inc. issued this week to buy Bitcoin.

Besides JNK, the Fed also holds the iShares Broad USD High Yield Corporate Bond ETF (ticker USHY), which also possesses a very small bit of MicroStrategy debt.

“It’s a pretty small amount, but to be honest I’m surprised to see it in there so soon,” said Athanasios Psarofagis, ETF analyst in Bloomberg Intelligence.

“Fixed-income portfolio managers have a bit of discretion of which bonds they can have in the portfolio, so they could be adding a small portion ahead of a possible index inclusion.”

Assuming that the Fed still retains the Fund, the central bank is exposed to the crypto distance although in a really modest amount, for now.

AnTy

AnTy was engaged in the crypto space fulltime for more than two decades now. Before her blockchain starts, she worked with the NGO, Doctor Without Borders as a fundraiser and since the

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