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In the past, institutional investors debated the legality and value of Bitcoin. But now, the question has shifted: How will Bitcoin integrate into the global financial system? With spot ETF funds surpassing $50 billion in assets under management and companies beginning to issue convertible bonds tied to Bitcoin, the answer is becoming clear: Financializing Bitcoin.
Bitcoin: From Volatile Asset to Programmable Infrastructure
Bitcoin is no longer just a speculative asset. It is becoming programmable collateral and a tool to optimize capital structure for financial institutions. Organizations that capture this trend early will shape the financial future of the next decade.
Convertible Bond Strategy: Leveraging Volatility as an Advantage
Traditional finance often views Bitcoin's volatility as a risk. But recent zero-interest convertible bond offerings by Strategy (formerly MicroStrategy) have reversed that perception. In these structures, Bitcoin's high volatility actually increases the value of the convertible options in the bonds.
As BTC prices rise, this bond can convert into equity with superior returns. This is an asymmetric profit-generating tool for investors while helping companies expand exposure to an appreciating asset.
Not just Strategy, this wave is spreading. Metaplanet (Japan), The Blockchain Group, and Twenty One Capital (France) are becoming 'Bitcoin treasury firms'—pursuing a model of borrowing fiat and converting it into digital hard assets, similar to what countries did during the Bretton Woods era.
Breaking Out of Corporate Balance Sheet Limits
Diversifying treasury with Bitcoin—as Tesla once did—or leveraging from the balance sheet is just the beginning. Digital finance and traditional finance are strongly intertwining.
Bitcoin as collateral 24/7: BTC-based loans surpassed $4 billion in 2024 according to Galaxy Digital, opening up the possibility of global, continuous, and uninterrupted credit access—outperforming traditional credit systems.
Structured products and on-chain yields: Current structured financial products not only provide exposure to Bitcoin but also come with liquidity guarantees, capital preservation, and enhanced yields. The DeFi ecosystem is also maturing with vaults for institutions, using BTC as yield-generating collateral.
Beyond ETFs: Bitcoin ETFs are just the beginning. Derivatives, tokenized funds, and structured notes are on the rise, providing better liquidity, downside risk protection, and enhanced profitability.
National-level acceptance: As some states in the U.S. build Bitcoin reserve bills, or countries study issuing 'Bitbonds'—we are no longer talking about portfolio diversification, but a new chapter in monetary sovereignty.
Legal Framework: Not a Barrier, but an Advantage for Pioneers
Unlike previous views, regulatory frameworks are no longer a barrier. Rather, they are a protective barrier for pioneering organizations. Legal frameworks like MiCA (Europe), Singapore's Payment Services Act, or the U.S. SEC's approval of crypto money market funds are evidence that digital assets can operate legally within the current structure.
A prime example is BlackRock's BUIDL fund—a tokenized money market fund, created entirely within the current legal framework.
Macroeconomic Forces Driving Trends
Economic instability, currency devaluation, rising interest rates, and a fragmented payment system are the driving forces making Bitcoin more attractive. Family offices that previously invested small amounts in Bitcoin are now starting to use it as collateral for loans. Companies are issuing convertible bonds, while investment funds are launching strategies to integrate Bitcoin with high yields. The 'digital gold' argument has now evolved into a comprehensive capital strategy.
Risks to Consider
Despite its great potential, Bitcoin remains a highly volatile and liquidity-risk asset—especially during market stress periods. The legal framework and technological infrastructure of DeFi are still being refined. However, when viewed more as programmable infrastructure than just a simple asset, Bitcoin opens up advantages that traditional assets cannot match: appreciating collateral.
Closing: Bitcoin Is the Foundation for New Finance
Bitcoin is not without risks, but when implemented with appropriate controls, it can transform into programmable infrastructure for finance: generating yield, collateral, macro hedging.
Just as the eurodollar shaped global liquidity in the 1960s, the balance sheet strategy tied to Bitcoin could play a similar role for the 2030s. The future of finance will not just use Bitcoin—but will be built on the Bitcoin foundation itself