Author: Ledn CEO Mauricio Di Bartolomeo, CoinDesk; Translated by: Bai Shui, Golden Finance
When Michael Saylor announced in August 2020 that MicroStrategy would convert $250 million of its cash reserves into Bitcoin, Wall Street analysts deemed it a reckless gamble. Saylor claimed at the time that Bitcoin was "superior to cash," which raised skepticism in traditional banking circles.
However, those banks that once mocked the adoption of Bitcoin by businesses are now scrambling to get involved in Bitcoin-backed loans, as they compete to leverage the superior qualities of Bitcoin as institutional-grade collateral and the booming product market fit.
Traditional collateral (such as real estate) requires manual appraisal, subjective evaluation, and complex legal frameworks (which vary by jurisdiction). In contrast, Bitcoin provides instant verification of collateral support through public blockchain data, 24/7 real-time settlement and clearing capabilities, consistent quality regardless of geographic location or counterparty, and the ability to programmatically execute loan terms.
When borrowers realize that they can instantly verify and potentially liquidate Bitcoin collateral at 3 AM on a Sunday—while real estate is waiting for manual assessments, subjective valuations, and possible 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; instead, it has pioneered a financial model that leverages the public markets to enhance its cryptocurrency position—issuing convertible notes and offering stock in the market to fund the purchase of Bitcoin. This strategy allows MicroStrategy to utilize the same financial engineering that empowers traditional banks, but with Bitcoin as the underlying asset instead of traditional financial instruments and real estate, resulting in MicroStrategy significantly outperforming 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 stocks and options contracts. MicroStrategy's actions demonstrate how deep the penetration of Bitcoin into traditional corporate financing is.
I also believe that financial services built around Bitcoin will become very popular as long-term holders and new investors seek to gain more returns from their positions. We expect the Bitcoin mortgage and revenue-generating products for global Bitcoin holders to grow rapidly.
Moreover, there is a nearly poetic answer to why Bitcoin-backed loans have become so popular—they are a true representation of financial inclusion, with entrepreneurs in Medellín facing the same collateral requirements and interest rates as those in Madrid. Every individual's Bitcoin possesses the same attributes, verification standards, and settlement processes. This standardization eliminates the arbitrary risk premiums that have historically been imposed on borrowers in emerging markets.
For decades, traditional banks have been promoting "global influence" while maintaining vastly different lending standards in different regions. Now, Bitcoin-backed loans have exposed the inherent inefficiency of this legacy: a remnant of an outdated financial system.
2. With the free flow of capital, borders disappear.
Countries are entering a new era of Bitcoin business and capital competition. Therefore, we expect to see new tax incentives specifically aimed at Bitcoin investors and businesses by 2025. These incentives will be implemented alongside 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 competing for Bitcoin mining operations, trading venues, and custody infrastructure.
El Salvador's status as a Bitcoin treasury represents an early experiment in national Bitcoin reserves. Although experimental, their actions and the recent proposal for a Bitcoin strategic reserve by 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 frequently 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 MicroStrategy's footsteps and reaped the rewards of the market. 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 appropriate 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. More banks should be allowed to participate in Bitcoin financial products - this will benefit consumers the most, as new capital and competition will drive down interest rates and make Bitcoin-backed loans more attractive.
4. The Mergers and Acquisitions of Bitcoin and Cryptocurrencies Intensify.
With the regulatory clarification of SAB 121 resolutions involving cryptocurrency custody and other guidance, 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 United States will acquire a cryptocurrency business next year.
Banks want to act quickly, and the development timeline for cryptocurrency infrastructure has exceeded the competitive window, while established companies are processing billions of transactions per month 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 delaying market entry.
The combination of operational maturity, regulatory clarity, and strategic necessity creates natural conditions for the banking industry to acquire cryptocurrency capabilities.
5. Public market verification of Bitcoin infrastructure.
The cryptocurrency industry is expected to have a breakthrough year in the public market. We anticipate at least one highly anticipated cryptocurrency initial public offering in the United States, with a valuation exceeding $10 billion. Major digital asset companies have established a complex layer of institutional services, with their revenue streams now comparable to those of traditional banks, processing billions of dollars in daily transactions, managing a large amount of custody business through a stringent compliance framework, 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 realize 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 are the five major changes in the relationship between Wall Street and BTC that will occur in 2025?
Author: Ledn CEO Mauricio Di Bartolomeo, CoinDesk; Translated by: Bai Shui, Golden Finance
When Michael Saylor announced in August 2020 that MicroStrategy would convert $250 million of its cash reserves into Bitcoin, Wall Street analysts deemed it a reckless gamble. Saylor claimed at the time that Bitcoin was "superior to cash," which raised skepticism in traditional banking circles.
However, those banks that once mocked the adoption of Bitcoin by businesses are now scrambling to get involved in Bitcoin-backed loans, as they compete to leverage the superior qualities of Bitcoin as institutional-grade collateral and the booming product market fit.
Traditional collateral (such as real estate) requires manual appraisal, subjective evaluation, and complex legal frameworks (which vary by jurisdiction). In contrast, Bitcoin provides instant verification of collateral support through public blockchain data, 24/7 real-time settlement and clearing capabilities, consistent quality regardless of geographic location or counterparty, and the ability to programmatically execute loan terms.
When borrowers realize that they can instantly verify and potentially liquidate Bitcoin collateral at 3 AM on a Sunday—while real estate is waiting for manual assessments, subjective valuations, and possible 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; instead, it has pioneered a financial model that leverages the public markets to enhance its cryptocurrency position—issuing convertible notes and offering stock in the market to fund the purchase of Bitcoin. This strategy allows MicroStrategy to utilize the same financial engineering that empowers traditional banks, but with Bitcoin as the underlying asset instead of traditional financial instruments and real estate, resulting in MicroStrategy significantly outperforming 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 stocks and options contracts. MicroStrategy's actions demonstrate how deep the penetration of Bitcoin into traditional corporate financing is.
I also believe that financial services built around Bitcoin will become very popular as long-term holders and new investors seek to gain more returns from their positions. We expect the Bitcoin mortgage and revenue-generating products for global Bitcoin holders to grow rapidly.
Moreover, there is a nearly poetic answer to why Bitcoin-backed loans have become so popular—they are a true representation of financial inclusion, with entrepreneurs in Medellín facing the same collateral requirements and interest rates as those in Madrid. Every individual's Bitcoin possesses the same attributes, verification standards, and settlement processes. This standardization eliminates the arbitrary risk premiums that have historically been imposed on borrowers in emerging markets.
For decades, traditional banks have been promoting "global influence" while maintaining vastly different lending standards in different regions. Now, Bitcoin-backed loans have exposed the inherent inefficiency of this legacy: a remnant of an outdated financial system.
2. With the free flow of capital, borders disappear.
Countries are entering a new era of Bitcoin business and capital competition. Therefore, we expect to see new tax incentives specifically aimed at Bitcoin investors and businesses by 2025. These incentives will be implemented alongside 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 competing for Bitcoin mining operations, trading venues, and custody infrastructure.
El Salvador's status as a Bitcoin treasury represents an early experiment in national Bitcoin reserves. Although experimental, their actions and the recent proposal for a Bitcoin strategic reserve by 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 frequently 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 MicroStrategy's footsteps and reaped the rewards of the market. 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 appropriate 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. More banks should be allowed to participate in Bitcoin financial products - this will benefit consumers the most, as new capital and competition will drive down interest rates and make Bitcoin-backed loans more attractive.
4. The Mergers and Acquisitions of Bitcoin and Cryptocurrencies Intensify.
With the regulatory clarification of SAB 121 resolutions involving cryptocurrency custody and other guidance, 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 United States will acquire a cryptocurrency business next year.
Banks want to act quickly, and the development timeline for cryptocurrency infrastructure has exceeded the competitive window, while established companies are processing billions of transactions per month 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 delaying market entry.
The combination of operational maturity, regulatory clarity, and strategic necessity creates natural conditions for the banking industry to acquire cryptocurrency capabilities.
5. Public market verification of Bitcoin infrastructure.
The cryptocurrency industry is expected to have a breakthrough year in the public market. We anticipate at least one highly anticipated cryptocurrency initial public offering in the United States, with a valuation exceeding $10 billion. Major digital asset companies have established a complex layer of institutional services, with their revenue streams now comparable to those of traditional banks, processing billions of dollars in daily transactions, managing a large amount of custody business through a stringent compliance framework, 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 realize that their survival depends on embracing change.