Author: Ledn CEO Mauricio Di Bartolomeo, CoinDesk; Translated by: Bai Shui, Jinse Finance
When Michael Saylor announced in August 2020 that MicroStrategy would convert $250 million of its cash reserves into Bitcoin, Wall Street analysts considered it a reckless gamble. Saylor claimed at the time that Bitcoin was "better than cash," which raised skepticism in the traditional banking sector.
However, nowadays, those who mocked the banks adopting Bitcoin are now rushing to participate in Bitcoin mortgages, as they compete to leverage the superior characteristics of Bitcoin as institutional-grade collateral and the thriving product-market fit.
Traditional collateral (such as real estate) requires manual appraisals, subjective assessments, and complex legal frameworks (which vary by jurisdiction). In contrast, Bitcoin offers instant verification of collateral support through public blockchain data, 24/7 real-time settlement and clearing capabilities, consistent quality regardless of geographical location or counterparty, and the ability to programmatically enforce loan terms.
When lenders realize they can instantly verify and potentially liquidate Bitcoin collateral at 3 a.m. on a Sunday—while real estate is still waiting for manual appraisals, subjective valuations, and potential evictions—there will be no turning back.
1. Traditional banking succumbs to Bitcoin.
MicroStrategy (MSTR)'s approach fundamentally changes how publicly traded companies view Bitcoin as a financial asset. The company does not simply hold Bitcoin, but has pioneered a financial model that leverages the public markets to expand its cryptocurrency position—issuing convertible notes and selling shares on the market to fund the purchase of Bitcoin. This strategy allows MicroStrategy to utilize the same financial engineering that has empowered traditional banks, but with Bitcoin as the underlying asset instead of traditional financial instruments and real estate, resulting in MicroStrategy's performance significantly surpassing that of spot Bitcoin ETFs.
Therefore, one of my predictions for 2025 is that MSTR will announce a 10-for-1 stock split to further expand its market share, as this will allow more investors to purchase shares and options contracts. MicroStrategy's actions demonstrate how deeply Bitcoin has penetrated traditional corporate financing.
I also believe that as long-term holders and new investors seek to gain more returns from their positions, financial services built around Bitcoin will become very popular. We expect the Bitcoin mortgage lending and revenue-generating products for global Bitcoin holders to grow rapidly.
Moreover, there is an almost poetic answer to why Bitcoin-backed loans have become so popular—they are a true representation of financial inclusion, as business owners in Medellin face the same collateral requirements and interest rates as those in Madrid. Every individual's Bitcoin has the same properties, verification standards, and settlement processes. This standardization eliminates the arbitrary risk premiums historically imposed on borrowers in emerging markets.
For decades, traditional banks have been promoting "global influence" while maintaining vastly different lending standards across regions. Now, Bitcoin-backed loans have exposed the inherent inefficiency of this legacy: the remnants of an outdated financial system.
2. With the free flow of capital, borders disappear.
Countries are entering a new era of competition for Bitcoin business and capital. As a result, we expect to see new tax incentives specifically for Bitcoin investors and businesses in 2025. These incentives will be implemented in conjunction with a fast-track visa program for cryptocurrency entrepreneurs and a regulatory framework designed to attract Bitcoin companies.
Historically, countries have competed for manufacturing bases or regional headquarters. They are now vying for Bitcoin mining operations, trading venues, and custody infrastructure.
El Salvador's Bitcoin treasury status represents an early experiment in national bitcoin reserves. While experimental, their actions and the recent proposal for a bitcoin strategic reserve in the United States have forced traditional financial centers to confront the role of bitcoin in sovereign finance.
Other countries will study and attempt to replicate these frameworks, preparing their own initiatives to attract capital flows denominated in Bitcoin.
3. Open the door for bank participants.
In the debt market, necessity drives innovation. Public companies now often utilize the bond market and convertible notes to fund Bitcoin-related transactions. This practice has transformed Bitcoin from a speculative asset into a cornerstone of corporate financial management.
Marathon Digital Holdings and Semler Scientific have successfully followed in the footsteps of MicroStrategy and reaped market rewards. This is the most important signal for financial managers and CEOs. Bitcoin is now catching their attention.
At the same time, the Bitcoin lending market has made significant progress over the past two years. Serious institutional lenders now require proper collateral segregation, transparent custody arrangements, and conservative loan-to-value ratios. The standardization of these risk management practices has precisely attracted previously reserved institutional capital.
Regulation is becoming clearer. The door should be opened for more banks to participate in Bitcoin financial products - this will benefit consumers the most, as new capital and competition will lower interest rates and make Bitcoin-backed loans more attractive.
4. The merger of Bitcoin and cryptocurrencies intensifies.
With the regulatory clarification of SAB 121 resolutions involving cryptocurrency custody and other guidelines, banks will face a critical choice: to establish or acquire a way to enter the growing Bitcoin and lending market. Therefore, we predict that at least one of the top 20 banks in the U.S. will acquire a crypto business in the coming year.
Banks want to act quickly, as the development timeline for cryptocurrency infrastructure has exceeded the competitive window, while established companies are already processing billions of transactions monthly through proven systems.
These operating platforms represent years of specialized development that banks cannot quickly replicate. The acquisition premium has decreased relative to the opportunity cost of delayed market entry.
The combination of operational maturity, regulatory clarity, and strategic necessity creates favorable conditions for the banking industry's ability to acquire cryptocurrencies.
5. Public market verification of Bitcoin infrastructure.
The cryptocurrency industry is expected to have a breakthrough year in the public market. We anticipate that at least one highly anticipated cryptocurrency initial public offering will emerge in the United States, with a valuation exceeding $10 billion. Major digital asset companies have established a complex layer of institutional services, whose revenue streams are now comparable to those of traditional banks, handling billions of dollars in daily transactions, managing a large amount of custodial business through strict compliance frameworks, and generating stable fee income from regulated activities.
Therefore, the next chapter of finance will not be written by those who resist this transformation, but by those who recognize that their survival depends on embracing change.
The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
What five major changes will the relationship between Wall Street and BTC undergo in 2025?
Author: Ledn CEO Mauricio Di Bartolomeo, CoinDesk; Translated by: Bai Shui, Jinse Finance
When Michael Saylor announced in August 2020 that MicroStrategy would convert $250 million of its cash reserves into Bitcoin, Wall Street analysts considered it a reckless gamble. Saylor claimed at the time that Bitcoin was "better than cash," which raised skepticism in the traditional banking sector.
However, nowadays, those who mocked the banks adopting Bitcoin are now rushing to participate in Bitcoin mortgages, as they compete to leverage the superior characteristics of Bitcoin as institutional-grade collateral and the thriving product-market fit.
Traditional collateral (such as real estate) requires manual appraisals, subjective assessments, and complex legal frameworks (which vary by jurisdiction). In contrast, Bitcoin offers instant verification of collateral support through public blockchain data, 24/7 real-time settlement and clearing capabilities, consistent quality regardless of geographical location or counterparty, and the ability to programmatically enforce loan terms.
When lenders realize they can instantly verify and potentially liquidate Bitcoin collateral at 3 a.m. on a Sunday—while real estate is still waiting for manual appraisals, subjective valuations, and potential evictions—there will be no turning back.
1. Traditional banking succumbs to Bitcoin.
MicroStrategy (MSTR)'s approach fundamentally changes how publicly traded companies view Bitcoin as a financial asset. The company does not simply hold Bitcoin, but has pioneered a financial model that leverages the public markets to expand its cryptocurrency position—issuing convertible notes and selling shares on the market to fund the purchase of Bitcoin. This strategy allows MicroStrategy to utilize the same financial engineering that has empowered traditional banks, but with Bitcoin as the underlying asset instead of traditional financial instruments and real estate, resulting in MicroStrategy's performance significantly surpassing that of spot Bitcoin ETFs.
Therefore, one of my predictions for 2025 is that MSTR will announce a 10-for-1 stock split to further expand its market share, as this will allow more investors to purchase shares and options contracts. MicroStrategy's actions demonstrate how deeply Bitcoin has penetrated traditional corporate financing.
I also believe that as long-term holders and new investors seek to gain more returns from their positions, financial services built around Bitcoin will become very popular. We expect the Bitcoin mortgage lending and revenue-generating products for global Bitcoin holders to grow rapidly.
Moreover, there is an almost poetic answer to why Bitcoin-backed loans have become so popular—they are a true representation of financial inclusion, as business owners in Medellin face the same collateral requirements and interest rates as those in Madrid. Every individual's Bitcoin has the same properties, verification standards, and settlement processes. This standardization eliminates the arbitrary risk premiums historically imposed on borrowers in emerging markets.
For decades, traditional banks have been promoting "global influence" while maintaining vastly different lending standards across regions. Now, Bitcoin-backed loans have exposed the inherent inefficiency of this legacy: the remnants of an outdated financial system.
2. With the free flow of capital, borders disappear.
Countries are entering a new era of competition for Bitcoin business and capital. As a result, we expect to see new tax incentives specifically for Bitcoin investors and businesses in 2025. These incentives will be implemented in conjunction with a fast-track visa program for cryptocurrency entrepreneurs and a regulatory framework designed to attract Bitcoin companies.
Historically, countries have competed for manufacturing bases or regional headquarters. They are now vying for Bitcoin mining operations, trading venues, and custody infrastructure.
El Salvador's Bitcoin treasury status represents an early experiment in national bitcoin reserves. While experimental, their actions and the recent proposal for a bitcoin strategic reserve in the United States have forced traditional financial centers to confront the role of bitcoin in sovereign finance.
Other countries will study and attempt to replicate these frameworks, preparing their own initiatives to attract capital flows denominated in Bitcoin.
3. Open the door for bank participants.
In the debt market, necessity drives innovation. Public companies now often utilize the bond market and convertible notes to fund Bitcoin-related transactions. This practice has transformed Bitcoin from a speculative asset into a cornerstone of corporate financial management.
Marathon Digital Holdings and Semler Scientific have successfully followed in the footsteps of MicroStrategy and reaped market rewards. This is the most important signal for financial managers and CEOs. Bitcoin is now catching their attention.
At the same time, the Bitcoin lending market has made significant progress over the past two years. Serious institutional lenders now require proper collateral segregation, transparent custody arrangements, and conservative loan-to-value ratios. The standardization of these risk management practices has precisely attracted previously reserved institutional capital.
Regulation is becoming clearer. The door should be opened for more banks to participate in Bitcoin financial products - this will benefit consumers the most, as new capital and competition will lower interest rates and make Bitcoin-backed loans more attractive.
4. The merger of Bitcoin and cryptocurrencies intensifies.
With the regulatory clarification of SAB 121 resolutions involving cryptocurrency custody and other guidelines, banks will face a critical choice: to establish or acquire a way to enter the growing Bitcoin and lending market. Therefore, we predict that at least one of the top 20 banks in the U.S. will acquire a crypto business in the coming year.
Banks want to act quickly, as the development timeline for cryptocurrency infrastructure has exceeded the competitive window, while established companies are already processing billions of transactions monthly through proven systems.
These operating platforms represent years of specialized development that banks cannot quickly replicate. The acquisition premium has decreased relative to the opportunity cost of delayed market entry.
The combination of operational maturity, regulatory clarity, and strategic necessity creates favorable conditions for the banking industry's ability to acquire cryptocurrencies.
5. Public market verification of Bitcoin infrastructure.
The cryptocurrency industry is expected to have a breakthrough year in the public market. We anticipate that at least one highly anticipated cryptocurrency initial public offering will emerge in the United States, with a valuation exceeding $10 billion. Major digital asset companies have established a complex layer of institutional services, whose revenue streams are now comparable to those of traditional banks, handling billions of dollars in daily transactions, managing a large amount of custodial business through strict compliance frameworks, and generating stable fee income from regulated activities.
Therefore, the next chapter of finance will not be written by those who resist this transformation, but by those who recognize that their survival depends on embracing change.