When Michael Saylor announced MicroStrategy's conversion of $250 million in treasury reserves to Bitcoin in August 2020, Wall Street analysts dismissed it as a reckless bet. At the time, Thaler declared Bitcoin “better than cash,” drawing skepticism from the traditional banking community.
But today, the same banks that scoffed at corporate adoption of Bitcoin are racing to take advantage of Bitcoin's superior properties as institutional-grade collateral and its suitability for commodity markets. I am trying to participate in a secured loan.
Traditional collateral, such as real estate, requires manual valuation, subjective valuation, and complex legal frameworks that vary by jurisdiction. In contrast, Bitcoin offers instant verification of collateral backing with public blockchain data, 24/7 real-time payment and clearing capabilities, uniform quality regardless of geography or counterparty, and the ability to programmatically enforce loan terms. I will.
Once you realize that a lender can instantly review and potentially liquidate your Bitcoin collateral at 3am on a Sunday while your property awaits manual appraisals, subjective appraisals, and possible evictions, it's time to turn back! will no longer be possible.
1. Traditional banking will succumb to Bitcoin.
MicroStrategy's (MSTR) approach has fundamentally changed the way public companies view Bitcoin as a financial asset. Rather than simply owning Bitcoin, the company has pioneered a financial model that leverages the public markets to expand its crypto positions, issuing convertible bonds and other markets to finance Bitcoin purchases. They are selling stocks. With this strategy, MicroStrategy leverages the same financial engineering that has made traditional banks powerful, but by using Bitcoin as the underlying asset rather than traditional financial instruments or real estate, MicroStrategy significantly outperforms the Spot Bitcoin ETF. Achieved superior performance.
As a result, one of my predictions for 2025 is that MSTR will do a 10-for-1 stock split to increase its market share, as more investors will be able to buy stocks and option contracts. It means making an announcement. MicroStrategy's playbook shows how deeply Bitcoin is penetrating traditional corporate finance.
I also believe that financial services built around Bitcoin will explode in popularity as long-term holders and new investors look to further leverage their positions. We expect rapid growth in Bitcoin-backed loans and yield-generating products for Bitcoin holders around the world.
Moreover, there is an almost poetic answer as to why Bitcoin-backed loans have become so popular. This is a true expression of financial inclusion, with business owners in Medellin facing the same collateral requirements and interest rates as business owners in Madrid. Each person's Bitcoin is subject to the same characteristics, verification standards, and liquidation process. This standardization removes the arbitrary risk premium that has historically been imposed on emerging market borrowers.
Traditional banks have touted their “global reach” for decades, maintaining widely varying lending standards in different regions. Currently, Bitcoin-backed loans are exposing this genetic inefficiency, a relic of an outdated financial system.
2. Borders disappear as capital flows freely.
Countries are entering a new era of competition for Bitcoin business and capital. As a result, new tax incentives are expected to be introduced in 2025 specifically targeting Bitcoin investors and businesses. These come alongside a fast-track visa program for crypto entrepreneurs and a regulatory framework designed to attract Bitcoin companies.
Historically, countries have competed for manufacturing sites and regional headquarters. They are currently competing for Bitcoin mining operations, trading venues, and storage infrastructure.
El Salvador's Bitcoin Treasury status represents an early experiment with a national Bitcoin reserve. Although experimental, their moves and recent proposals for a strategic Bitcoin reserve in the United States are forcing traditional financial centers to confront Bitcoin's role in sovereign finance.
Other countries will study and attempt to emulate these frameworks as they prepare their own initiatives to attract Bitcoin-denominated capital flows.
3. Banks are competing against obsolescence.
In the bond market, necessity drives innovation. Publicly traded companies now regularly use debt markets and convertible bonds to fund Bitcoin-related transactions. This practice transformed Bitcoin from a speculative asset to a cornerstone of corporate financial management.
Companies like Marathon Digital Holdings and Semler Scientific have successfully followed MicroStrategy's lead, and the market is rewarding them. This is the most important signal for financial managers and CEOs. Bitcoin is currently attracting attention.
Meanwhile, the Bitcoin lending market has made great strides over the past two years. With the logjam resolved, serious institutional investors are now demanding proper collateral segregation, transparent custody arrangements, and conservative loan-to-value ratios. This standardization of risk management practices will attract exactly the type of institutional capital that has traditionally been on the sidelines.
Clearer U.S. regulations should pave the way for more banks to enter Bitcoin financial products. This will most benefit consumers. New capital and competition will drive down interest rates, making Bitcoin-backed loans even more attractive.
4. M&A between Bitcoin and virtual currencies is intensifying.
As regulations become clearer through the SAB 121 resolution addressing crypto custody and other guidance, banks will face important choices: enter or exit the growing market for Bitcoin and lending. . As a result, we expect at least one of the top 20 U.S. banks to acquire a crypto business within the next year.
Banks want to respond quickly and the development timelines for cryptocurrency infrastructure are beyond competitive, while incumbent companies are already processing billions of dollars per month through battle-tested systems. I am.
These operational platforms represent specialized developments over many years that banks cannot immediately imitate. The acquisition premium reduces against the opportunity cost of delayed market entry.
The confluence of operational maturity, regulatory clarity, and strategic necessity is creating natural conditions for the banking industry to acquire crypto capabilities. These moves reflect previous patterns of financial technology integration, in which banks have historically acquired electronic trading platforms rather than building internal capabilities.
5. The public market validates Bitcoin infrastructure.
The cryptocurrency industry is poised for a landmark year in the public markets. At least one high-profile crypto initial public offering valued at more than $10 billion is expected to take place in the U.S. Large digital asset companies are now offering sophisticated institutional offerings that mirror traditional banking revenue streams We have built a service layer with a substantial custodial operation with a rigorous compliance framework that processes and manages billions of transactions every day and generates stable fee income from regulated activities. Masu.
The next chapter in finance will therefore be written not by those who resist this change, but by those who recognize that their very survival depends on embracing it.
