Galaxy Digital: Is Bitcoin a Financial Asset or a Technological Tool?

Original Author: Frank Corva, Bitcoin Magazine

Original Compilation: Deng Tong, Jinse Finance

At the recent "MicroStrategy World: Enterprise Bitcoin" conference, Galaxy Digital's research head Alex Thorn provided valuable insights into the evolving landscape of Wall Street and corporate adoption of Bitcoin.

In an interview with Bitcoin Magazine, Thorn explored how Wall Street is beginning to embrace Bitcoin, the dual nature of Bitcoin as a financial asset and a technological tool, and how institutional investors are starting to view Bitcoin as a safe-haven asset.

Bitcoin: Financial Asset or Technological Tool?

When asked whether companies are more likely to view Bitcoin (BTC) as a financial asset or to leverage its underlying technology more, Thorn acknowledged that both could be true.

"This is the same question we have for the average user," he pointed out. Thorn drew on insights from David Marcus of LightSpark (who also spoke at the event), emphasizing how the use of Bitcoin varies by region and demand.

In countries with currency devaluation, Bitcoin can serve as a store of value. Conversely, in places like Bitcoin Beach in El Salvador, there is a strong enthusiasm for using it as a medium of exchange.

Thorn highlighted the potential for companies to utilize Bitcoin technology for global remittances.

Thorn stated that companies can benefit from solutions like LightSpark, OpenNode, and Voltage, which help use the Bitcoin Lightning Network as a payment channel without needing to hold the asset.

"Honestly, it's hard to know," Thorn summarized, noting that both uses are viable depending on the specific situation.

The Mainstreaming of Bitcoin

The discussion then shifted to Wall Street's adoption of Bitcoin and the impact of spot Bitcoin ETFs.

Thorn confirmed that Bitcoin is becoming more mainstream, partly due to the surge of available investment tools like spot Bitcoin ETFs.

"There are now multiple ways to acquire Bitcoin," he explained.

"You not only have these ETFs that are very easily accessible for both retail and institutional investors, but over the years, you also have institutional companies—Galaxy being one of them—that make it easy for institutions to buy spot Bitcoin, not to mention Rivers, Swans, and Coinbase," he added.

Thorn also pointed out the macroeconomic factors driving Bitcoin's appeal. He noted that financial leaders like Jamie Dimon and Jay Powell are increasingly recognizing the unsustainability of U.S. Treasury bonds, a viewpoint historically held by gold advocates.

This realization makes it an increasingly attractive investment.

Thorn stated, "When we talk to macro hedge funds, we see this." He then emphasized that many hedge funds have been trading Bitcoin for years.

Bitcoin ETFs and Corporate Bonds

When discussing the potential impact of spot Bitcoin ETFs on corporate finances, Thorn compared it to the gold market after the first gold ETF was approved in 2006.

While he acknowledged the four-year boom and bust cycles in Bitcoin's history, he stated that current interest is driven by more complex factors than in the past.

Thorn remarked, "This is not just a wave of people hearing about Bitcoin for the first time." This indicates that investors are developing a deeper, more strategic interest.

Thorn observed that long-term investors like endowments and pensions are increasingly curious, and after initial hesitation, they are re-engaging with Bitcoin.

Thorn noted that these investors have longer investment horizons and view Bitcoin as a hedging tool in a volatile risk environment.

Thorn explained, "Bitcoin is at the intersection of risk and hedging." He indicated that while Bitcoin has not yet been traded as a mainstream hedging tool, the concept is continually evolving.

Intergenerational Shifts in Investors and Future Adoption

Finally, the discussion touched on the generational dynamics influencing Bitcoin adoption.

Thorn acknowledged that older generations tend to be hesitant to embrace new technologies. However, he pointed out that the launch of spot Bitcoin ETFs could ease this transition by simplifying access.

"The younger generation adopts innovations more quickly," Thorn added, suggesting that as wealth shifts to a younger generation more familiar with Bitcoin, adoption rates may increase.

Thorn also emphasized the role of financial advisors in this transition.

Many rely on advisors to manage their investments, and with spot Bitcoin ETFs available on wealth management platforms, advisors can introduce Bitcoin into clients' portfolios. This could lead to significant inflows from older populations who might otherwise be reluctant to engage directly with the asset.

In summary, Alex Thorn's insights at the conference highlighted the multifaceted future of Bitcoin.

Whether as a treasury asset, a technological tool, or a macroeconomic hedging instrument, Bitcoin's role is expanding.

As generational shifts occur and spot Bitcoin ETFs become more prevalent, the adoption of Bitcoin among corporate and individual investors is bound to grow.