Building on Bitcoin

The New Bedrock of Financial Innovation

Imagine a city where the skyscrapers of modern finance aren’t built on shaky ground, but on the bedrock of digital certainty. This is the transformation underway as Bitcoin moves from the fringes to the foundation of global capital markets. Once dismissed as a speculative plaything, Bitcoin is now being embraced by corporations as a launchpad for financial innovation.

Historically, gold served as the ultimate financial anchor – predictable, scarce, and trusted. It backed currencies, underpinned central bank reserves, and settled global transactions. Yet, in the digital age, gold’s analog nature is less able to keep pace with the demands of 21^st-century finance.

Bitcoin is Programmable

Bitcoin offers the same predictability and scarcity as gold, but with the added superpower of programmability. At its core, Bitcoin is software, making it programmable like any other digital tool. For example, the Lightning Network software enables instant, off-chain Bitcoin transactions, reducing costs and increasing speed. This programmability transforms Bitcoin from a static store of value into a dynamic platform for financial innovation. Developers can build custom rules – such as multi-signature scripts and time-locked transactions – enabling new financial instruments like payment channels and collateralized lending.

Corporations aren’t just holding Bitcoin as an inflation hedge; they’re using it as a rock-solid foundation for building new financial products. This shift is at the heart of Bitcoin’s evolving role.

The Recursive Flywheel

Bitcoin’s adoption and innovation follow a recursive, self-reinforcing cycle. Each wave of adoption makes the next more likely, spinning the Bitcoin flywheel faster and faster.

Phase 1: Early Corporate Adoption

In August 2020, MicroStrategy (now Strategy) ignited the flywheel by converting its balance sheet to Bitcoin. Since then, Strategy has accumulated 555,000 coins worth $57 billion.

Phase 2: Financial Product Innovation

Companies like Strategy began leveraging their Bitcoin holdings to offer new products, such as convertible bonds backed by Bitcoin.

Phase 3: Regulatory Clarity

Regulatory developments accelerated adoption. The SEC’s approval of Bitcoin ETFs in January 2024 enabled institutional investors to buy Bitcoin. In May 2025, new rules are allowing U.S. banks to custody Bitcoin for clients, signaling a significant regulatory shift. With pro-Bitcoin leadership at the SEC, further guidance on Bitcoin-based products is expected.

Phase 4: Institutional Expansion – Where We Are Today

As adoption and regulatory clarity increase, more institutions are offering Bitcoin-backed financial products. Cantor Fitzgerald is expanding its Bitcoin offering, including a flagship financing business that lets clients use Bitcoin as collateral for loans and credit. Cantor is also partnering with Softbank, Tether, and Bitfinex to buy $3.6 billion in Bitcoin, echoing Strategy’s approach. Meanwhile, Vivek Ramaswamy’s Strive Asset Management is merging with Asset Entities, aiming to raise $1 billion to hold Bitcoin as a treasury asset and seeking SEC approval for a Bitcoin Bond ETF. If approved, this would signal regulatory acceptance of hybrid products that blend fixed income with digital assets.

21st Century Finance: Bitcoin as Foundational Layer

While challenges remain, the rapid emergence of Bitcoin-backed products – convertible bonds, collateralized lending, and ETFs – demonstrates that Bitcoin may become the foundational layer for new financial instruments. While ETFs and bonds have long existed, they were historically built atop traditional rails and anchored to fiat or physical assets. Now, institutions are leveraging Bitcoin’s programmability and digital scarcity to create innovative products that blend blockchain’s security and transparency with familiar legacy structures.

Bitcoin’s rise isn’t just about holding it; it’s about what’s being built on top of it. With every cycle, Bitcoin is woven deeper into the fabric of 21^st century finance. No longer just a speculative asset, Bitcoin is becoming the digital bedrock upon which the next generation of financial innovation is rising – skyscrapers built not on sand, but on programmable certainty.

The opinions and views expressed by the author are personal and based on economic or market conditions at the time of publication. Actual economic or market events may turn out differently than anticipated. Nothing in this material is intended to serve as personalized investment, tax, or insurance advice.