Institutions Build Around Bitcoin, Focusing on Financing and Holding

The conversation around bitcoin is shifting from whether to own it to how to finance, hold, and use it. A recent conference brought together industry experts who discussed capital markets, implementation frameworks, and institutional infrastructure built around bitcoin.

TD Cowen's Lance Vitanza examined the discussions at the September 28 Bitcoin Treasuries Conference in New York. He noted that participants are no longer just considering whether to own bitcoin, but rather how it can be used as a foundation for new financial products.

The conference covered various financing structures, including bitcoin-backed bonds and convertible securities. These instruments allow companies to issue multiple types of securities against the same treasury, which is dominated by bitcoin. One example is Strategy Inc.'s preferred shares, which give investors exposure to the company's balance sheet, but with different terms and risks compared to owning BTC directly.

Blackrock representatives viewed exchange-traded funds (ETFs) and self-custody as complementary approaches that serve different investors. The Securities and Exchange Commission has also allowed in-kind creation and redemption for crypto ETFs, which enables authorized participants to exchange eligible assets for fund shares or vice versa.