Originates from two terms; anus/butthole and homosexual male.
Put the two together and the term is given to a person who is just extremely gay. 'Buttiboy' is not a word used to discriminate a person in which hatred is drawn towards, but one of your hommies, who, in your own opinion, deserves the expression because they have done something againts the dignity of all male species.
Your boy stands and start singing Spice Girls. You yell out "Shut the fuck up you buttiboy, and sit your ass down"
"Yo man stop being such a buttiboy. Ever since you got outta juvie, you've been sitting awefully close to me, your scaring me dawg"