A first-of-its-kind municipal bond backed by bitcoin is moving closer to issuance after receiving a sub-investment-grade rating from Moody’s Investors Service, marking a major step in the convergence of digital assets and traditional public finance.
The proposed $100 million issuance, structured by the New Hampshire Business Finance Authority (BFA), earned a Ba2 rating — two notches below investment grade, according to Bloomberg reporting.
If completed, the deal would represent the first municipal bond backed by bitcoin collateral, opening a potential new pathway for institutional capital to access the asset class through regulated fixed-income markets.
Under the proposed structure, bond payments will be funded through proceeds generated from bitcoin collateral posted by borrower CleanSpark. Investors will also have upside exposure, with additional payments tied to bitcoin price appreciation.
At the same time, downside protections are built into the deal. If bitcoin’s price falls below a predefined threshold, the trust can be liquidated to repay bondholders in full.
Critically, the bonds carry no backing from taxpayers.
“No public funds of the State of New Hampshire or any political subdivision thereof may be used to pay amounts under the rated bonds,” Moody’s noted in its report, emphasizing that the issuer has no taxing authority to cover any shortfall.
Key players behind the bitcoin deal
Digital asset firm Wave Digital Assets will oversee transaction administration, while BitGo will serve as custodian for the bitcoin collateral, securing it in regulated cold storage.
The structure was initially approved by the BFA board back in November, 2025, positioning New Hampshire as a potential leader in integrating bitcoin into public finance markets.
Governor Kelly Ayotte backed the initiative at the time, framing it as a way to attract investment without exposing taxpayers to risk.
“This is an innovative way to bring more investment opportunities to our state and position us as a leader in digital finance,” Ayotte said.
Volatility remains a key risk
The Ba2 rating underscores the core tension at the heart of the product: combining one of the most volatile asset classes with one of the traditionally safest.
Bitcoin has fallen nearly 50% from its October 2025 peak near $126,000, highlighting the risks tied to collateral value fluctuations. Over the same period, high-yield municipal bond indices posted modest positive returns, illustrating the contrast between the two asset classes.
Still, proponents argue the structure’s collateralization model — and liquidation safeguards — could make bitcoin viable within conservative capital markets.
The deal is part of a broader effort by Wave and its partners to create a bridge between digital assets and traditional debt markets, allowing bitcoin to function as institutional-grade collateral.
If successful, the issuance could establish a template for future crypto-backed municipal or corporate debt offerings, effectively creating a new hybrid asset class.
“This isn’t just one transaction—it’s the opening of a new debt market,” Wave co-founder Les Borsai said when the structure was first unveiled.
For now, the bond has no confirmed pricing date. But with a rating in place, the experiment to merge bitcoin with municipal finance is entering a more concrete phase, one that could test whether traditional investors are ready to underwrite crypto risk in exchange for yield and upside exposure.
