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. “Superior to cash,” Saylor declared about bitcoin at the time, generating skepticism in traditional banking circles.
However, today, those same banks that scoffed at corporate bitcoin adoption are now scrambling to participate in bitcoin-secured lending as they compete to capitalize on its superior features as institutional-grade collateral and thriving product-market fit.
Traditional collateral, such as real estate, requires manual appraisals, subjective valuations, and complex legal frameworks that vary by jurisdiction. Bitcoin, on the other hand, offers instant verification of collateral support via public blockchain data, 24/7 real-time settlement and settlement capabilities, consistent quality regardless of geography or counterparty, and the ability to programmatically enforce loan terms.
When a lender realizes that they can instantly verify and potentially liquidate bitcoin collateral at 3 a.m. on a Sunday, while real estate awaits manual appraisals, subjective valuations, and possible evictions, there will be no turning back.
1. Traditional banking kneels before bitcoin.
MicroStrategy’s (MSTR) approach fundamentally altered the way public companies view bitcoin as a treasury asset. Rather than simply owning bitcoin, the company has pioneered a treasury model to tap public markets to amplify its crypto position: issuing convertible notes and stock offerings in the market to fund bitcoin purchases. This strategy has allowed MicroStrategy to significantly outperform spot bitcoin ETFs by leveraging the same financial engineering that made traditional banks powerful, but with bitcoin as the underlying asset instead of traditional financial instruments and real estate.
As a result, one of my predictions for 2025 is that MSTR will announce a 10-for-1 stock split to increase its market share by allowing many more investors to purchase shares and options contracts. The MicroStrategy playbook demonstrates how deeply bitcoin has penetrated traditional corporate finance.
I also believe that financial services built around bitcoin will skyrocket in popularity as long-term holders and new investors look to get more out of their positions. We expect to see rapid growth in bitcoin-secured loans and yield-generating products for bitcoin holders around the world.
Furthermore, there is an almost poetic answer to why bitcoin-backed loans have become so popular: they are a true representation of financial inclusion, and a business owner in Medellín faces the same collateral requirements and interest rates as one in Madrid. Each person’s bitcoin has identical properties, verification standards, and settlement processes. This standardization eliminates the arbitrary risk premiums historically imposed on borrowers in emerging markets.
Traditional banks marketed “global reach” for decades, while maintaining vastly different lending standards across regions. Now, bitcoin-backed loans expose this inherited inefficiency for what it is: a relic of an antiquated financial system.
2. Borders fall as capital flows freely.
Nations are entering a new era of competition for bitcoin business and capital. Consequently, we expect to see new tax incentives targeted specifically at bitcoin investors and companies in 2025. These will occur alongside fast-track visa programs for crypto entrepreneurs and regulatory frameworks designed to attract bitcoin companies.
Historically, nations competed for manufacturing bases or regional headquarters. They now compete for bitcoin mining operations, trading venues and custody infrastructure.
El Salvador’s bitcoin treasury position represents early experimentation with nation-states’ bitcoin reserves. While experimental, their measures and the recent proposal for a Strategic Bitcoin Reserve in the United States force traditional financial centers to confront the role of bitcoin in sovereign finance.
Other nations will study and attempt to replicate these frameworks, preparing their own initiatives to attract bitcoin-denominated capital flows.
3. Banks run against obsolescence.
In debt markets, necessity drives innovation. Public companies now routinely tap bond and convertible note markets to finance bitcoin-related transactions. The practice has transformed bitcoin from a speculative asset to a cornerstone of corporate treasury management.
Companies like Marathon Digital Holdings and Semler Scientific have managed to follow MicroStrategy’s example and the market has rewarded them. This is the most important signal for treasury managers and CEOs. Bitcoin has caught your attention now.
Meanwhile, the bitcoin lending markets have come a long way in the past two years. With deadlock out of the way, serious institutional lenders now demand proper collateral segregation, transparent escrow arrangements and conservative loan-to-value ratios. This standardization of risk management practices attracts precisely the type of institutional capital that was previously kept on the sidelines.
Greater regulatory clarity in the US should open the door for more banks to get involved in bitcoin financial products; This will benefit consumers the most as new capital and competition will lower rates and make bitcoin-backed loans even more attractive.
4. Bitcoin and cryptocurrency mergers and acquisitions intensify.
As regulatory clarity emerges through SAB resolution 121 addressing cryptocurrency custody and other guidance, banks will face a critical choice: build or buy their way into the growing bitcoin and lending market. As a result, we predict that at least one of the top 20 US banks will acquire a cryptocurrency business next year.
Banks will want to act quickly, and cryptocurrency infrastructure development timelines will extend beyond competitive windows, while established companies already process billions in monthly volume through battle-tested systems.
These operating platforms represent years of specialized development that banks cannot quickly replicate. The acquisition premium is reduced compared to the opportunity cost of delay in market entry.
The confluence of operational maturity, regulatory clarity, and strategic need creates natural conditions for the banking industry’s acquisition of cryptocurrency capabilities. These moves reflect previous patterns of fintech integration in which banks historically acquired e-commerce platforms rather than building in-house capabilities.
5. Public markets validate bitcoin infrastructure.
The cryptocurrency industry is set for a watershed year in the public markets. We expect to see at least one high-profile cryptocurrency IPO exceeding $10 billion in valuation in the US. Major digital asset companies have created sophisticated institutional service layers with revenue streams that now reflect the of traditional banks, processing billions in daily transactions, managing substantial custody operations with rigorous 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 change, but by those who recognize that their own survival depends on accepting it.
