How Will the Relationship Between Wall Street and Bitcoin Change in 2025: 5 Predictions

When Michael Saylor announced that MicroStrategy was converting $250 million of its cash reserves into bitcoin in August 2020, Wall Street analysts viewed it as a risky gamble. “Better than cash,” Saylor declared about bitcoin at the time, which made the traditional banking sector skeptical. However, today the very banks that mocked the application of bitcoin for businesses are now competing to participate in mortgage lending activities with bitcoin as they race to leverage its superior features as an institutional collateral asset and strong alignment between products and markets. Traditional collateral, such as real estate, requires manual appraisals, subjective valuations, and complex legal frameworks that vary by jurisdiction. In contrast, Bitcoin offers instant verification of collateral through public blockchain data, 24/7 real-time settlement and liquidation capabilities, uniform quality regardless of geography or counterparty, and the ability to enforce loan terms programmatically. When lenders realize they can instantly verify and potentially liquidate bitcoin collateral at 3 a.m. Sunday—while the property lies awaiting manual appraisals, subjective valuations, and the possibility of eviction—there’s no turning back.

1. Traditional banks succumb to Bitcoin. MicroStrategy’s (MSTR) approach has fundamentally changed the way public companies view bitcoin as a treasury asset. Instead of just holding bitcoin, the company pioneered a treasury model that leveraged the public market to amplify its cryptocurrency position—issuing convertible bonds and offering shares on the market to fund bitcoin purchases. This strategy has allowed MicroStrategy to significantly outperform spot bitcoin ETFs by harnessing the same financial techniques that have made traditional banks so powerful, but with bitcoin as the underlying asset instead of traditional financial instruments and real estate. Therefore, one of my predictions for 2025 is that MSTR will announce a stock split at a ratio of 10:1 to expand market share because this will allow more investors to buy stocks and options contracts. MicroStrategy’s playbook demonstrates how bitcoin has deeply penetrated traditional corporate finance. I also believe that financial services built around bitcoin will explode in popularity as long-term holders and new investors look to earn more from their positions. We expect to see rapid growth in bitcoin mortgage loans and profit-generating products for bitcoin holders worldwide. Furthermore, there is an almost romantic answer to why bitcoin-backed loans have become so popular - they are a true representation of financial inclusion, with a business owner in Medellin facing the same collateral and interest requirements as a business owner in Madrid. Each person’s bitcoin has the same characteristics, verification standards, and liquidation procedures. This standardization eliminates arbitrary risk insurance fees that were previously imposed on borrowers in emerging markets. Traditional banks have marketed a ‘global scope’ for decades while maintaining significantly different lending standards across regions. Now, lending activities supported by bitcoin have exposed the inefficiency of this capital allocation: a relic of an outdated financial system.
2. Borders will collapse when capital flows freely Countries are entering a new era of competition for bitcoin business and capital. Therefore, we expect to see new tax incentives specifically targeted at bitcoin investors and businesses in 2025. These incentives will take place alongside fast-track visa programs for crypto entrepreneurs and regulatory frameworks designed to attract bitcoin companies. Countries have historically competed for regional production facilities or headquarters. They now compete for bitcoin mining, trading venues, and custody infrastructure. El Salvador’s bitcoin gamble represents an initial experiment with a nation’s bitcoin reserve. Despite its experimental nature, their actions and the recent proposal of the US Strategic Bitcoin Reserve force 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 investment valued in bitcoin.
3. Banks are racing against obsolescence In the debt market, the demand for innovation is driving change. Public companies now often tap into the bond market and convertible bonds to fund bitcoin-related transactions. This has transformed bitcoin from a speculative asset to the foundation of corporate treasury management. Companies like Marathon Digital Holdings and Semler Scientific have succeeded by following the lead of MicroStrategy, and the market has rewarded them. This is the most important signal for treasury managers and CEOs. Bitcoin has now captured their attention. Meanwhile, the bitcoin lending market has come a long way in the past two years. With the cleanup of the unnecessary, serious lending institutions now require proper collateral separation, transparent custody arrangements, and conservative loan-to-value ratios. The standardization of these risk management activities attracts exactly the type of capital of the organization that was previously on the sidelines. The United States issuing clearer regulations will open the door for more banks to participate in bitcoin financial products - this will bring the most benefits to consumers, with new capital and competition that will lower interest rates and make bitcoin-backed loans more attractive.
4. Bitcoin and cryptocurrency M&A activity is getting stronger When the clarity of the regulations appears through Resolution SAB 121 addressing the issue of cryptocurrency custody and other guidance, banks will have to face an important choice: to build or to acquire to enter the bitcoin market and the growing lending. Therefore, we predict that at least one of the top 20 banks in the United States will acquire a cryptocurrency business in the coming year. Banks will want to act quickly and the timeline for developing the cryptocurrency infrastructure will exceed the competition, while established companies have been handling monthly transaction volumes of billions of dollars through tested systems. These operating platforms represent years of specialized development that banks cannot replicate quickly. Redemption fees are reduced compared to the opportunity cost of delayed market entry. The convergence of operational maturity, regulatory clarity, and strategic necessity creates natural conditions for the banking industry to access crypto competence. These moves mirror previous models of fintech integration, in which banks often approached electronic transaction platforms rather than building internal capacity.
5. The public market verifies the bitcoin infrastructure The cryptocurrency industry is gearing up for a breakthrough year in the public market. We expect to see at least one prominent public offering of cryptocurrencies exceeding $10 billion in valuation in the United States. Major digital asset companies have built sophisticated organizational service layers with revenue streams now mirroring traditional banks, processing billions of transactions daily, managing significant custodial activities within strict compliance frameworks, and generating stable fee income from managed activities. Therefore, the next chapter of finance will be written not by those who oppose this change but by those who recognize that their existence depends on accepting it. Note: The views expressed in this article are those of the author and do not necessarily reflect the views of CoinDesk, Inc. or its owners and subsidiaries. DYOR! #Write2Win #Write&Earn $BTC {spot}(BTCUSDT)