Bitcoin-Backed Digital Credit Hits $16 Billion, Could Rival Crypto Giant

The market for Bitcoin-backed digital credit has grown significantly in two years, expanding to roughly $16 billion. Dan Hillery of UXTO thinks this financialization layer on top of Bitcoin could one day rival its own $1.5 trillion market cap.

Hillery attributes the growth to variable-rate preferred securities like STRC and SATA. He explains that these securities are priced in a way that keeps them anchored near $100 par through buybacks, which helps maintain their value.

In an interview with Patrick Green for Bitcoin Magazine, Hillery discussed his structured credit fund, including its senior and junior tranches. The fund concentrates leverage and transfers volatility to investors, but Hillery also warned about liquidity risks, redemptions, and the potential for credit-versus-equity risks.