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, Jinse Caijing

When Michael Saylor announced in August 2020 that MicroStrategy would convert its $250 million in cash reserves into Bitcoin, Wall Street analysts regarded it as a reckless gamble. Saylor claimed at the time that Bitcoin was "superior to cash," which raised skepticism in traditional banking circles.

However, now those who mocked the banks adopting Bitcoin are scrambling to participate in Bitcoin-backed loans, as they compete 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 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 functionality, consistent quality regardless of geographic location or counterparties, and the ability to programmatically execute loan terms.

When borrowers realize they can instantly verify and potentially liquidate Bitcoin collateral at 3 AM on a Sunday—while real estate is still waiting for manual appraisals, subjective valuations, and potential evictions—there will be no turning back.

1. Traditional banking yields to Bitcoin.

MicroStrategy (MSTR)'s approach fundamentally changes how publicly traded companies view Bitcoin as a financial asset. The company is not simply holding Bitcoin but has pioneered a financial model that leverages the public markets to enhance its cryptocurrency position—issuing convertible notes and selling stock in the market to finance 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's performance significantly outpacing 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 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 gain more returns from their positions, financial services built around Bitcoin will become very popular. We expect that Bitcoin mortgage loans and revenue-generating products for global Bitcoin holders will grow rapidly.

In addition, there is an almost poetic answer to why Bitcoin-backed loans have become so popular – they are a true representation of financial inclusion, with business owners in Medellín facing the same collateral requirements and interest rates as those in Madrid. Every Bitcoin has the same attributes, verification standards, and settlement processes. This standardization removes 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 across regions. Now, Bitcoin-backed loans have exposed the inherent inefficiency of this hereditary nature: a relic 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 for Bitcoin investors and businesses in 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 been competing 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 in the U.S. 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. Opening 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 the footsteps of MicroStrategy and have reaped the rewards from the market. This is the most important signal for financial managers and CEOs. Bitcoin is now attracting their attention.

At the same time, the Bitcoin lending market has made significant progress over the past two years. Serious institutional lenders are now demanding proper 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. The door should be opened 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. The merger and acquisition of Bitcoin and cryptocurrencies is intensifying.

With the regulatory clarification of the SAB 121 resolution involving cryptocurrency custody and other guidance, banks will face a crucial choice: to establish or acquire a means to enter the growing Bitcoin and lending markets. Therefore, we predict that at least one of the top 20 banks in the United States will acquire a crypto business next year.

Banks want to act quickly, as the development timeline for cryptocurrency infrastructure has exceeded the competitive window, while established companies are processing billions of transactions monthly 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's ability to acquire cryptocurrencies.

5. Public market validates Bitcoin infrastructure.

The cryptocurrency industry is expected to experience a breakthrough year in the public market. We anticipate that at least one highly anticipated cryptocurrency initial public offering will emerge 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 custody business through a rigorous 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 change, but by those who recognize that their survival depends on embracing change.