New Hampshire’s Bitcoin-Backed Municipal Bond Gets Closer to Moody’s Rating
A first-of-its-kind bitcoin-backed municipal bond is nearing issuance after receiving a minimum investment grade rating from Moody’s Investors Service, marking a major step in the convergence of digital assets and traditional public funds.
The proposed issuance of $100 million, made by the New Hampshire Business Finance Authority (BFA), has earned a rating of Ba2 – two notches below investment grade, according to a Bloomberg report.
Once completed, the deal will represent the first municipal bond backed by a bitcoin security, opening a potentially new way for institutional capital to access the asset class through regulated fixed income markets.
Under the proposed structure, the bond payments would be funded by the proceeds of the bitcoin collateral posted by borrower CleanSpark. Investors will also have inverse exposure, with additional payments tied to bitcoin price increases.
At the same time, lower protections are built into the agreement. If the price of bitcoin falls below a predefined limit, the trust can be liquidated to repay the bondholders in full.
Sadly, the bonds are not backed by taxpayers.
“None of the public funds of the State of New Hampshire or any of its political subdivisions may be used to pay the amounts below the rated bonds,” Moody’s noted in its report, stressing that the issuer has no tax authority to pay any shortfall.
Key players behind the bitcoin deal
Digital assets company Wave Digital Assets will oversee transaction management, while BitGo will act as the custodian of the bitcoin collateral, secured in a controlled cold storage facility.
The building was first approved by the BFA board back in November, 2025, positioning New Hampshire as a potential leader in integrating bitcoin into the public capital markets.
Governor Kelly Ayotte supported the plan at the time, framing it as a way to attract investors without putting taxpayers at risk.
“This is a new way to bring more investment opportunities to our state and position us as a leader in digital finance,” Ayotte said.
Volatility remains a major risk
The Ba2 rating underscores the main tension at the heart of the brand: combining one dynamic asset class with another that is traditionally more secure.
Bitcoin is down nearly 50 percent from its October 2025 peak of nearly $126,000, highlighting the risks associated with the security’s price volatility. At the same time, high-yield municipal bond indexes posted modest returns, reflecting the differences between the two asset classes.
Still, proponents argue the structure’s collateralization model — and liquidation protections — could make bitcoin work within conservative capital markets.
The deal is part of a broader effort by Wave and its partners to build a bridge between digital assets and traditional credit markets, allowing bitcoin to act as an institutional-grade collateral.
If successful, the issue may establish a template for crypto-backed municipal or corporate debt offerings in the future, effectively creating a new category of consolidated assets.
“This is not just one transaction—it’s the opening of a new credit market,” said Wave founder Les Borsai when the framework was first introduced.
Currently, the bond does not have a confirmed price date. But at the current rate, the experiment of combining bitcoin with municipal funds is entering a concrete phase, which may test whether traditional investors are ready to underwrite crypto risk in exchange for yield and inverse exposure.
