NYDIG Considers Floating Funding for Bitcoin-Backed Lending Market

NYDIG, a Stone Ridge subsidiary that provides Bitcoin-backed loans, revealed in a 2024 letter to investors that it is preparing to expand its services through float financing. The letter refutes common objections to Bitcoin's utility, suggesting that it can generate cash flow through sales and serve as collateral for fiat loans. Analysis points out that integrating float into Bitcoin-backed loans could change the market and provide a source of liquidity for BTC holders. Stone Ridge envisions a positive feedback loop that can increase the utility of Bitcoin holdings by excluding Bitcoin holdings from the market, accelerating the depreciation of fiat currencies and further increasing the value of Bitcoin. Sam Callahan, an advisor to Marathon Digital, called the move significant because it would unlock "one of the largest pools of investable funds in the entire financial system" for the Bitcoin ecosystem. He also agreed with the report's view that more efficient lending through Bitcoin support would reduce costs and prevent BTC from being sold for liquidity. This would increase prices by increasing scarcity and demand, attracting more institutions and accelerating its adoption.