At the recent MicroStrategy World: Bitcoin for Business conference, Alex Thorn, Head of Research at Galaxy Digital, provided valuable insights into the evolving landscape of Bitcoin adoption by Wall Street and businesses.
In an interview with Bitcoin Magazine, Thorne explored how Wall Street began to embrace Bitcoin, the dual nature of Bitcoin's role as a treasury asset and a technology tool and how institutional investors began to see Bitcoin as more of a safe-haven asset. .
Bitcoin: a treasury asset or a technological tool?
When asked whether companies would be more likely to look at Bitcoin (BTC) as a treasury asset or use its underlying technology, Thorne acknowledged that it was likely some of both.
“This is the same question we have for regular users,” he noted. Drawing on insights from LightSpark's David Marcus, who also spoke at the event, Thorne highlighted how Bitcoin usage varies by region and need.
In countries where the value of currencies is depreciating, Bitcoin acts as a store of value. Conversely, in places like Bitcoin Beach in El Salvador, there is strong enthusiasm for its use as a medium of exchange.
Thorne stressed the possibility of companies benefiting from Bitcoin technology to transfer money globally.
Businesses can leverage solutions like LightSpark, OpenNode, and Voltage, which make it easy to use Bitcoin's Lightning Network as a means of payment without having to hold the asset, according to Thorne.
“It's hard to know, honestly,” Thorne concluded, noting that both uses are applicable depending on the context.
Bitcoin normalization
The conversation then turned to Wall Street's adoption of Bitcoin and the impact of spot Bitcoin ETFs.
Thorne asserted that bitcoin is becoming more normalized, in part due to the proliferation of accessible investment vehicles such as bitcoin ETFs.
“There are many ways to access Bitcoin right now,” he explained.
“Not only have you had these ETFs, which are more accessible to both individuals and institutions, but you've also had, for several years, institutional companies — Galaxy is one of them — that make it easier for institutions to buy spot Bitcoin, not to mention Rivers, Swans And Currency rules,” he added.
Thorne also pointed to macroeconomic factors driving Bitcoin's appeal. He pointed to the growing recognition among financial leaders, such as Jamie Dimon and Jay Powell, of the unsustainability of the US national debt, which has traditionally been a view held by gold advocates.
This realization has made it an increasingly attractive investment.
“We see this when we talk to macro hedge funds,” Thorne said, before highlighting that many have been trading bitcoin for years.
Bitcoin ETFs and Corporate Treasuries
Addressing the potential impact of spot Bitcoin ETFs on corporate Treasuries, Thorne drew parallels with the gold market after 2006, after the first gold ETF was approved.
While he acknowledged Bitcoin's historic four-year boom-and-bust cycles, he noted that current interest is driven by more complex factors than in the past.
“It's not just a wave of people who are first hearing about Bitcoin,” Thorne said, implying a deeper, more strategic interest among investors.
Thorne has noticed growing curiosity among long-term investors such as endowments and pensions, who are re-engaging with Bitcoin after initial hesitations.
These investors, who have longer time horizons, see Bitcoin as a hedge in a volatile risk environment, according to Thorne.
“Bitcoin falls into this gap between risk and hedging,” Thorn explained, noting that although Bitcoin is not yet traded as a major hedge, its perception is evolving.
Intergenerational transitions and future adoption
Finally, the discussion touched on the generational dynamics that influence Bitcoin adoption.
Thorne acknowledged that older generations are often reluctant to embrace new technologies. However, he noted that the introduction of spot Bitcoin ETFs could mitigate this shift by simplifying access.
“Younger generations are more (adopting) innovation quickly,” Thorne noted, before adding that as wealth is transferred to younger generations who are more familiar with Bitcoin, adoption rates may increase.
Thorne also highlighted the role of financial advisors in this transformation.
Many people rely on advisors to manage their investments, and with spot Bitcoin ETFs available on wealth management platforms, advisors can introduce Bitcoin into their clients' portfolios. This could lead to significant inflows from older demographics who may be reluctant to engage with assets directly.
In conclusion, Alex Thorne's insights from the conference underscore the multi-faceted future of Bitcoin.
Whether it is a treasury asset, a technology tool, or a macroeconomic hedge, Bitcoin's role is expanding.
As generational shifts occur and Bitcoin ETFs become more widespread, Bitcoin adoption among businesses and individual investors alike is expected to grow.
