Why Bitcoin’s Liquidity Advantage Matters as Institutions Move In

Bitcoin Magazine
Why Bitcoin’s Liquidity Advantage Matters as Institutions Move In

Bitcoin’s portability, divisibility and accessibility could increasingly distinguish it from traditional stores of value as more institutions enter the market, according to SALT Lending CEO and Co-Founder Shawn Owen.

Speaking on BMTV, Owen pointed to Bitcoin’s resilience while gold and other long-duration assets sold off, arguing that some of Bitcoin’s most basic characteristics give it advantages over competing assets.

“It is easier to buy Bitcoin than gold,” Owen said.

That advantage becomes even more apparent when mobility matters.

“It’s easier to move Bitcoin out of, say, somewhere where you need to leave quickly because there’s unrest in the area than gold,” Owen said. “It’s far more portable and divisible and easy to use than real estate.”

Bitcoin’s Liquidity Advantage

Gold, real estate and bitcoin can all serve as long-term stores of value, but accessing and moving that value looks very different.

Physical gold requires storage and transportation. Real estate is tied to a specific location and can take time to buy or sell. Bitcoin can be transferred globally and divided into small units without those same physical constraints.

Those characteristics can also give Bitcoin holders more flexibility when they need liquidity.

Rather than selling bitcoin to access dollars, holders can potentially use it as collateral and borrow against its value while maintaining exposure to the underlying asset.

That model becomes particularly relevant if Owen’s longer-term outlook for Bitcoin adoption proves correct.

Institutional FOMO Is Arriving

Owen believes the experience many individual Bitcoin holders have already gone through, discovering Bitcoin and wishing they had gotten involved earlier, may eventually play out among much larger institutions.

“Every human goes through this experience where you learn about Bitcoin and wish you’d been earlier,” Owen said. “I think that will be true of sovereigns and banks and institutions of all sizes.”

Banks have taken considerably longer to enter the market, but Owen believes that is beginning to change as many of the hurdles surrounding Bitcoin have been addressed.

“Banks have been slow, but are now getting in after all the boxes have been checked,” he said. “FOMO is real.”

Owen cautioned that adoption and price appreciation will not necessarily happen in a straight line. As Bitcoin matures and more capital enters the market, he expects some dampening of its historic volatility.

That does not change his longer-term outlook.

“Adoption depends on the time horizon we’re talking about,” Owen said. “Dampening of volatility, and we will continue to see that, but that doesn’t mean over the next decade we won’t see serious adoption and increase in price.”

“Never Sell Your Bitcoin”

That long-term view also shapes how Owen thinks holders should approach their bitcoin.

“I have always said never sell your bitcoin,” Owen said. “Long term we will continue to see prices increasing significantly in comparison to fiat currencies.”

For holders who share that outlook, selling bitcoin to cover a large purchase, business expense or other liquidity need means giving up future exposure to the bitcoin they sell.

Bitcoin-backed lending provides an alternative.

SALT allows eligible borrowers to use bitcoin as collateral to access cash without selling the underlying bitcoin. Once the loan is repaid, the collateral is returned to the borrower.

The model aligns closely with Owen’s broader thesis. If Bitcoin continues becoming easier to access and more widely adopted by banks, institutions and potentially sovereigns, long-term holders may become increasingly reluctant to sell simply because they need liquidity.

Instead, they can potentially maintain their bitcoin position while accessing the value stored within it.

As Bitcoin adoption expands, the conversation may increasingly move beyond how to acquire bitcoin and toward how holders can use the wealth they have accumulated without necessarily selling the asset.

SALT Lending is the Official Liquidity Sponsor of BMTV. Learn more about borrowing against your bitcoin and explore SALT’s BMTV offer at https://saltlending.com/bmtv/?utm_source=bmtv&utm_medium=article&utm_campaign=52783658-BMTV%20article&utm_term=BMTV

Disclaimer: SALT Lending is a paid sponsor of BMTV and serves as BMTV’s Official Liquidity Sponsor. This article is sponsored content and does not necessarily reflect the views or opinions of Bitcoin Magazine. The information provided is for promotional purposes and should not be considered financial advice. Readers are encouraged to conduct their own research before making any investment decisions related to Bitcoin or other financial products mentioned herein.

This post Why Bitcoin’s Liquidity Advantage Matters as Institutions Move In first appeared on Bitcoin Magazine and is written by Josh Plischke.