The New Hampshire Business Finance Authority has advanced plans for a $100 million Bitcoin-backed municipal bond, earning a Ba2 rating from Moody’s Investors Service on April 1, 2026, two steps below investment grade.
The proposed issuance represents the first municipal bond collateralized by Bitcoin, with bond payments funded through proceeds from Bitcoin collateral and bondholders eligible for additional payments tied to Bitcoin price appreciation, while liquidation provisions protect against downside risk.
Bond Structure Includes Collateral Liquidation Safeguards and Upside Participation
Under the proposed structure, CleanSpark, a Bitcoin mining and data center company, will borrow the bond proceeds and provide Bitcoin collateral from which bond payments will be made. Bondholders will receive payments funded through proceeds generated from the Bitcoin collateral, with additional upside exposure tied to Bitcoin price appreciation.
Downside protections are built into the transaction. If Bitcoin’s value falls below a predefined threshold, the trust can be liquidated to repay bondholders in full. The structure is designed to provide institutional investors exposure to Bitcoin through regulated fixed-income markets while maintaining traditional debt instrument protections.
Wave Digital Assets LLC will oversee day-to-day transaction administration, and BitGo Bank & Trust will serve as custodian, securing the Bitcoin collateral in regulated cold storage. The bond has no confirmed pricing date, and the authority has not announced a specific issuance timeline.
No Taxpayer Funds or State Backing Involved in Bond Structure
Moody’s report emphasized that no public funds of the State of New Hampshire or any political subdivision may be used to pay amounts under the rated bonds, and the issuer has no taxing power to make up any shortfall in payments. The bonds carry no backing from state taxpayers, with all payment obligations tied exclusively to the Bitcoin collateral and transaction structure.
New Hampshire Governor Kelly Ayotte voiced support when the conduit approved the structure in November 2025, stating that the bond represents an innovative way to bring more investment opportunities to the state while positioning New Hampshire as a leader in digital finance without risking state funds or taxpayer dollars.
The New Hampshire Business Finance Authority, a state conduit, is structuring the bonds to be sold through two series. The issuance would represent the first municipal bond backed by Bitcoin collateral, potentially establishing a template for future crypto-backed municipal or corporate debt offerings.
Ba2 Rating Reflects Tension between Bitcoin Volatility and Municipal Bond Safety
The Ba2 rating from Moody’s falls two steps below the lowest level of investment grade, reflecting the core tension of combining one of the most volatile asset classes with traditionally conservative municipal bond markets. Bitcoin traded at approximately $66,800 at the time of the rating announcement, down nearly 50% from its October 2025 peak near $126,000.
During the same period, an index of high-yield municipal bonds returned 1.54% to investors, illustrating the contrast between the two asset classes. Proponents argue the structure’s collateralization model and liquidation safeguards could make Bitcoin viable within conservative capital markets.
The transaction represents a broader effort by Wave Digital Assets and its partners to create a bridge between digital assets and traditional debt markets, allowing Bitcoin to function as institutional-grade collateral. Wave co-founder Les Borsai stated when the structure was first unveiled that the transaction represents the opening of a new debt market rather than just a single transaction.
FAQ
What is the New Hampshire Bitcoin-backed municipal bond?
The New Hampshire Business Finance Authority is planning to issue $100 million in municipal bonds collateralized by Bitcoin, with CleanSpark providing the Bitcoin collateral and bond payments funded through proceeds generated from that collateral. Bondholders receive additional payments tied to Bitcoin price appreciation, while liquidation provisions protect against downside risk.
What credit rating did the bond receive and what does it mean?
Moody’s Investors Service assigned a Ba2 rating to the proposed bonds, which is two steps below the lowest level of investment grade. The rating reflects the novel structure combining Bitcoin collateral with municipal bond issuance and the absence of state backing or taxpayer funds supporting the bonds.
Is there any state or taxpayer risk associated with the bonds?
No. Moody’s report explicitly states that no public funds of the State of New Hampshire or any political subdivision may be used to pay amounts under the bonds, and the issuer has no taxing power to make up any shortfall. The bonds are secured exclusively by Bitcoin collateral and the transaction structure.
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