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 treasury reserves into bitcoin, Wall Street analysts viewed it as a reckless gamble. Saylor claimed at the time that bitcoin was 'superior to cash,' which raised skepticism among traditional banks.
However, those banks that once scoffed at bitcoin enterprises are now rushing to engage in bitcoin mortgages, competing 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 assessments, subjective evaluations, and complex legal frameworks (varying by jurisdiction). In contrast, bitcoin offers instant verification of collateral support through public blockchain data, 24/7 real-time settlement and liquidation capabilities, uniform quality regardless of geographic location or counterparty, and the ability to programmatically execute loan terms.
When lenders realize they can instantly verify and potentially liquidate bitcoin collateral at 3 a.m. on a Sunday—while real estate waits for manual assessments, subjective valuations, and potential evictions—there will be no turning back.
1. Traditional banking succumbs to bitcoin.
MicroStrategy's (MSTR) approach fundamentally changes how public companies view bitcoin as a financial asset. The company does not simply hold bitcoin but has pioneered a financial model that leverages public markets to expand its cryptocurrency position—issuing convertible notes and issuing stock in the market to fund bitcoin purchases. This strategy allows MicroStrategy to utilize the same financial engineering that empowered traditional banks, but with bitcoin as the underlying asset instead of traditional financial instruments and real estate, resulting in significantly better performance than spot bitcoin ETFs.
Thus, 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 stock 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 derive more yield from their positions, financial services built around bitcoin will become immensely popular. We expect rapid growth in bitcoin mortgage and revenue-generating products for global bitcoin holders.
Furthermore, there is a nearly poetic answer as to why bitcoin-backed loans have become so popular—they are a true representation of financial inclusivity, with business owners in Medellín facing the same collateral requirements and interest rates as those in Madrid. Everyone's bitcoin has the same attributes, verification standards, and liquidation processes. This standardization eliminates the arbitrary risk premiums historically imposed on emerging market borrowers.
For decades, traditional banks have touted 'global impact' while maintaining vastly different lending standards across regions. Now, bitcoin-backed loans expose the inherent inefficiencies of this genetic legacy: the remnants of an outdated financial system.
2. As capital flows freely, borders disappear.
Countries are entering a new era of bitcoin business and capital competition. Therefore, we expect to see new tax incentives specifically targeting bitcoin investors and businesses by 2025. These incentives will be implemented alongside rapid visa programs for cryptocurrency entrepreneurs and regulatory frameworks aimed at attracting bitcoin companies.
Historically, nations have competed for manufacturing bases or regional headquarters. They are now competing for bitcoin mining businesses, trading venues, and custody infrastructure.
El Salvador's status as a bitcoin treasury represents an early experiment in national bitcoin reserves. While experimental, their actions and the recent proposals for a bitcoin strategic reserve in the U.S. force 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 bitcoin-denominated capital flows.
3. Opening the door for banking participants.
In the debt markets, 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.
Companies like Marathon Digital Holdings and Semler Scientific have successfully followed in MicroStrategy's lead and reaped market rewards. This is the most significant signal for financial managers and CEOs. Bitcoin is now capturing their attention.
Meanwhile, the bitcoin lending market has made significant strides over the past two years. Serious institutional lenders now require proper collateral isolation, transparent custody arrangements, and conservative loan-to-value ratios. This standardization of risk management practices precisely attracts previously reserved institutional capital.
Regulation is becoming clearer. This should open the door for more banks 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. Intensified mergers and acquisitions in bitcoin and cryptocurrency.
With the regulatory clarification regarding the SAB 121 resolution involving cryptocurrency custody and other guidance, banks will face a critical choice: to build or acquire a way to enter the growing bitcoin and lending markets. Therefore, we predict that at least one bank among the top 20 in the U.S. will acquire a crypto business next year.
Banks want to act quickly, as the development timeline for cryptocurrency infrastructure exceeds the competitive window, while established firms are processing billions in monthly transactions 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 natural conditions for the banking industry to acquire cryptocurrency capabilities.
5. Public markets validate bitcoin infrastructure.
The cryptocurrency industry is poised for a breakthrough year in the public markets. We expect at least one highly anticipated cryptocurrency IPO in the U.S. with a valuation exceeding $10 billion. Major digital asset companies have established sophisticated institutional service layers, with revenue streams now comparable to traditional banks, processing billions in daily transactions, managing significant custody operations under stringent compliance frameworks, and generating stable fee income from regulated activities.
Therefore, the next chapter of finance will not be written by those resisting this change but by those who recognize that their survival depends on embracing it.
