Galaxy Digital executive: Is BTC a financial asset or a technical tool?

Author: Frank Corva, Bitcoin Magazine; Translator: Deng Tong, Golden Finance

At the recent "MicroStrategy World: Enterprise Bitcoin" conference, Galaxy Digital Research Director Alex Thorn provided valuable insights into the evolving landscape of Bitcoin adoption on Wall Street and in the corporate sector.

In an interview with Bitcoin Magazine, Thorn discussed how Wall Street began to accept Bitcoin, its dual nature as a financial asset and technological tool, and how institutional investors are beginning to view Bitcoin as a safe-haven asset.

Bitcoin: Financial Asset or Technological Tool?

When asked if businesses are more likely to view Bitcoin (BTC) as a financial asset or more to leverage its underlying technology, Thorn admitted that it’s probably a bit of both.

“It’s the same question we have for regular users,” he noted. Drawing on insights from LightSpark’s David Marcus, who also spoke at the event, Thorn highlighted how Bitcoin’s usage varies by region and demand.

In countries with devalued currencies, Bitcoin can serve as a store of value. Conversely, in places like Bitcoin Beach in El Salvador, there’s a strong enthusiasm for using it as a medium of exchange.

Thorn highlighted the potential for businesses to leverage Bitcoin technology for global remittances.

Thorn said companies could benefit from solutions like LightSpark, OpenNode, and Voltage, which facilitate the use of Bitcoin’s Lightning Network as a payment channel without having to hold the asset.

“Honestly, it’s hard to know,” Thorn concluded, noting that both uses are viable, depending on the circumstances.

Bitcoin Universalization

The conversation then turned to Wall Street’s adoption of Bitcoin and the impact of a spot Bitcoin ETF.

Thorn confirmed that Bitcoin is becoming more universal, in part due to the proliferation of available investment vehicles like spot Bitcoin ETFs.

“There are multiple ways to get access to Bitcoin now,” he explained.

“Not only do you have these ETFs that are very accessible to both retail and institutions, but you’ve also had institutional firms for years — Galaxy being one of them — that have made it easy for institutions to buy spot Bitcoin, not to mention Rivers, Swans, and Coinbase,” he added.

Thorn also pointed to macroeconomic factors driving Bitcoin’s appeal. He noted that financial leaders such as Jamie Dimon and Jay Powell are increasingly recognizing the unsustainability of U.S. national debt, a view that has historically been held by gold advocates.

This recognition makes it an increasingly attractive investment.

“We see this when we talk to macro hedge funds,” Thorn said, before stressing that many hedge funds have been trading Bitcoin for years.

Bitcoin ETFs and Corporate Bonds

Speaking about the potential impact of a spot Bitcoin ETF on corporate finances, Thorn compared it to the gold market after the first gold ETF was approved in 2006.

While he acknowledged the four-year boom and bust cycle in Bitcoin’s history, he said the current interest is driven by more complex factors than in the past.

“This is not just a wave of people hearing about Bitcoin for the first time,” Thorn said. This means there is a deeper, more strategic interest from investors.

Thorn observed that there is growing curiosity among long-term investors such as endowments and pensions, who are re-engaging in Bitcoin after initial hesitation.

Thorn said that these investors have a longer time horizon and view Bitcoin as a hedge in a volatile risk environment.

“Bitcoin sits in the gap between risk and hedge,” Thorn explained. He said that while Bitcoin is not yet traded as a mainstream hedge, its perception is evolving.

Investor Generational Change and Future Adoption

Finally, the discussion touched on generational dynamics that influence Bitcoin adoption.

Thorn acknowledged that older generations are often hesitant to embrace new technologies. However, he noted that the launch of a spot Bitcoin ETF could ease this transition by simplifying access.

“Younger generations are more [fast to adopt] innovations,” Thorn added, adding that adoption is likely to increase as wealth transfers to younger generations who are more familiar with Bitcoin.

Thorn also highlighted the role of financial advisors in this shift.

Many people rely on advisors to manage their investments, and with spot Bitcoin ETFs available on wealth management platforms, advisors can introduce Bitcoin into their clients’ portfolios. This could drive significant inflows from an older population that might otherwise be reluctant to directly participate in the asset.

In summary, Alex Thorn’s insights from the conference highlighted the multifaceted future of Bitcoin.

Whether as a treasury asset, a technological tool, or a macroeconomic hedge, Bitcoin’s role is expanding.

As generational shift occurs and spot Bitcoin ETFs become more common, Bitcoin adoption among businesses and individual investors is bound to grow.