From coindesk by Mauricio Di Bartolomeo

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 gamble. "Superior to cash," Saylor declared of bitcoin at the time, drawing skepticism from traditional banking circles.

Yet today, those same banks that sneered at bitcoin's corporate adoption are now scrambling to participate in bitcoin-collateralized lending as they race to capitalize on its superior characteristics as institutional-grade collateral and a thriving product-market fit.

Traditional collateral, such as real estate, requires manual appraisals, subjective valuations and complex legal frameworks that vary by jurisdiction. Bitcoin, by contrast, offers instant verification of collateral backing through public blockchain data, 24/7 real-time settlement and liquidation capabilities, uniform quality regardless of geography or counterparty, and the ability to enforce lending terms programmatically.

When a lender realizes that they can instantly verify and potentially liquidate bitcoin collateral at 3 a.m. on a Sunday — while real estate sits waiting for manual appraisals, subjective valuations, and potential evictions— there will be no going back.

1. Traditional banking bends the knee to bitcoin.

MicroStrategy's (MSTR) approach fundamentally altered how public companies view bitcoin as a treasury asset. Rather than simply holding bitcoin, the firm has pioneered a treasury model of leveraging public markets to amplify its crypto position — issuing convertible notes and at the market equity offerings to finance purchases of bitcoin. This strategy has allowed MicroStrategy to significantly outperform spot bitcoin ETFs by harnessing 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 further its market share as it will allow many more investors to purchase shares and options contracts. MicroStrategy's playbook demonstrates just how deeply bitcoin has penetrated traditional corporate finance.

I also believe financial services built around bitcoin are set to explode 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-collateralized loans and yield-generating products for bitcoin holders worldwide.

Moreover, there’s an almost poetic answer to why bitcoin-backed loans have become so popular — they are a true representation of financial inclusion, with a business owner in Medellín facing the same collateral requirements and interest rates as one in Madrid. Each person’s bitcoin carries identical properties, verification standards and liquidation processes. This standardization strips away 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 lending exposes 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 specifically targeting bitcoin investors and businesses in 2025. These will happen alongside fast-track visa programs for crypto entrepreneurs and regulatory frameworks designed to attract bitcoin companies.

Nations historically competed for manufacturing bases or regional headquarters. Now they compete for bitcoin mining operations, trading venues and custody infrastructure.

El Salvador's bitcoin treasury position represents early experimentation with nation-state bitcoin reserves. While experimental, their moves and the recent proposal for a U.S. Strategic Bitcoin Reserve forces traditional financial centers to confront bitcoin's role 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 race against obsolescence.

In debt markets, necessity drives innovation. Public companies now routinely tap bond markets and convertible notes to finance bitcoin-related transactions. The practice has transformed bitcoin from a speculative asset into a cornerstone of corporate treasury management.

Companies like Marathon Digital Holdings and Semler Scientific have been successful in following MicroStrategy's lead, and the market has rewarded them. This is the most important signal for treasury managers and CEOs. Bitcoin’s got their attention now.

Meanwhile, bitcoin lending markets have come a long way over the last two years. With the deadwood being cleared away, serious institutional lenders now demand proper collateral segregation, transparent custody arrangements and conservative loan-to-value ratios. This standardization of risk management practices attracts precisely the type of institutional capital that previously sat on the sidelines.

More regulatory clarity out of the U.S. should open the door for more banks to get involved in bitcoin financial products — this will benefit consumers the most, with new capital and competition driving rates down and making bitcoin-backed loans even more compelling.

4. Bitcoin and crypto M&A intensifies.

As regulatory clarity emerges through the SAB 121 resolution addressing crypto custody and other guidance, banks will face a critical choice: build or buy their way into the growing market of bitcoin & lending. As a result, we predict at least one of the top 20 U.S. banks will acquire a crypto business in the coming year.

Banks will want to move fast, and development timelines for cryptocurrency infrastructure stretch beyond competitive windows, while established firms already process billions in monthly volume through battle-tested systems.

These operational platforms represent years of specialized development that banks cannot rapidly replicate. The acquisition premium shrinks against the opportunity cost of delayed market entry.

The confluence of operational maturity, regulatory clarity and strategic necessity creates natural conditions for the banking industry’s acquisition of cryptocurrency capabilities.These moves mirror previous financial technology integration patterns in which banks historically acquired electronic trading platforms rather than building internal capabilities.

5. Public markets validate bitcoin infrastructure.

The cryptocurrency industry is poised for a breakthrough year in public markets. We expect to see at least one high-profile crypto initial public offering exceeding $10 billion in valuation in the U.S. Major digital asset companies have built sophisticated institutional service layers with revenue streams that now mirror those of traditional banks, processing billions in daily transactions, managing substantial custody operations with rigorous compliance frameworks and generating stable fee income from regulated activities.

The next chapter of 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.