Alex Thorn of Galaxy Digital’s Head of Research, Alex Thorn provided invaluable insights at the MicroStrategy World Conference: Bitcoin for Corporations. He discussed the changing landscape for Bitcoin adoption on Wall Street.
Thorn discussed in an interview with Bitcoin Magazine how Wall Street is beginning to embrace Bitcoin. He also explored the dual role of Bitcoin as a technology tool as well as a treasury. Institutional investors have begun to view bitcoin more as a safe-haven asset.
Bitcoin: Treasury Asset or Technological Tool
Thorn said that corporations would probably use both Bitcoin and its technology.
“That’s the same question we have about regular users,” He noted. Thorn, who drew on the insights of David Marcus, a LightSpark representative, also present at the event to speak, highlighted that Bitcoin usage varies depending on region and needs.
Bitcoin can be used as an investment in countries with currencies that are falling. Bitcoin Beach is a popular place in El Salvador where it’s used as an exchange medium.
Thorn stressed the importance of leveraging Bitcoin for money transfer globally.
Thorn says that companies could gain from using solutions such as LightSpark and OpenNode. These allow the Lightning Network of Bitcoin to be used for payments without having to hold the Bitcoin asset.
“It’s honestly hard to know,” Thorn concluded that depending on context, both usages are possible.
Normalizing Bitcoin
Conversations then turned to Wall Street’s acceptance of Bitcoin, and its effect on spot Bitcoin exchange-traded funds (ETFs).
Thorn confirms that Bitcoin’s normalization is partly due to the availability of investment vehicles such as spot Bitcoin ETFs.
“There’s a multitude of ways to access bitcoin right now,” He clarified.
“You’ve not only got these ETFs, which are super easy to access for both retail and institutions, but you also have had, for several years now, institutional companies — Galaxy is one of them — that make it easy for institutions to buy spot bitcoin, let alone the Rivers, Swans The following are some examples of how to get started: CoinbasesHe added.
Thorn also emphasized the macroeconomic forces that drive Bitcoin’s popularity. He observed a growing recognition among financial Leaders such as Jamie Dimon, and Jay Powell have expressed their concerns about the insustainability US national debt.
It is a very attractive investment.
“We see this when we talk to macro hedge funds,” Thorn highlighted that some people have traded bitcoins for many years.
Bitcoin ETFs & Corporate Treasuries
Thorn, in addressing the impact that spot Bitcoin ETFs could have on corporate treasuries after 2006, when the first ETF was approved, drew comparisons to the gold market.
He acknowledged Bitcoin’s four-year historical boom and bust cycle, but suggested current interest was driven by factors more sophisticated than the past.
“It’s not just a wave of people first hearing about Bitcoin,” Thorn said, inferring a more profound, strategic interest from investors.
Thorn noticed a growth in interest from long-term institutional investors such as pensions and endowments, which are returning to Bitcoin after an initial hesitation.
According to Thorn, these investors with longer-term time frames see bitcoin as an insurance against a volatile environment.
“Bitcoin is in this chasm between risk and hedging,” Thorn said that, while Bitcoin is still not viewed as an alternative to traditional hedges, the perception of it is changing.
The Generational Shift and the Future of Adoption
The discussion also touched upon the impact of generational differences on Bitcoin adoption.
Thorn acknowledges that older generations often hesitate to adopt new technology. However, Thorn noted that the advent of Bitcoin spot ETFs may ease this transition through easier access.
“The younger generations more [quickly adopt] innovation,” Thorn added, before stating that the adoption rate may rise as bitcoin becomes more popular among younger generations.
Thorn has also highlighted the importance of financial Advisors are needed to help with this transition.
Advisors are often trusted to help people manage their investment portfolios. As spot Bitcoin ETFs appear on platforms for wealth management, they can now introduce bitcoin into their client’s portfolios. It could lead to significant inflows of older investors who would otherwise not be interested in the asset.
Alex Thorn summarizes his conference insights by highlighting the future multifaceted nature of Bitcoin.
Bitcoin is becoming more important, whether as an asset for treasury, a technology tool or as a hedge against macroeconomic risks.
Bitcoin adoption is expected to rise as spot Bitcoin ETFs and generational shifts take place.
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Source: bitcoinmagazine.com