Bitcoin and Wall Street: Insights from Alex Thorn of Galaxy Digital

At the recent MicroStrategy World: Bitcoin for Corporations conference, Alex Thorn, head of research at Galaxy Digital, provided valuable insights into the evolving landscape of Bitcoin adoption by Wall Street and corporations.

In an interview with Bitcoin Magazine, Thorn explored how Wall Street has come to embrace Bitcoin, the dual nature of Bitcoin’s role as both a treasury asset and a technology tool, and how both institutional investors are starting to view Bitcoin as more of a safe haven. .

Bitcoin: Treasury bills or technological tool?

When asked whether companies will be more likely to view Bitcoin (BTC) as a treasury asset or use its underlying technology, Thorn acknowledged there would likely be some of both.

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

In countries where currencies are depreciating, Bitcoin serves as a store of value. Conversely, in places like Bitcoin Beach in El Salvador, there is great enthusiasm for using it as a medium of exchange.

Thorn highlighted the potential for companies to use Bitcoin technology for global money transfers.

Businesses could benefit from solutions like LightSpark, OpenNode and Voltage, which facilitate the use of Bitcoin’s Lightning Network as a payment rail without necessarily owning the asset, Thorn said.

“It’s honestly hard to know,” Thorn concluded, indicating that both applications are feasible depending on the context.

Normalizing Bitcoin

The conversation then shifted to Wall Street’s adoption of Bitcoin and the effect of the spot Bitcoin ETFs.

Thorn confirmed that Bitcoin is becoming more common, partly due to the increase in accessible investment vehicles such as spot Bitcoin ETFs.

“There are currently a large number of ways to access bitcoin,” he explained.

“Not only do you have these ETFs, which are super easy to access for both individuals and institutions, but you’ve also had institutional companies for a number of years now – Galaxy is one of them – making it easy for institutions to buy shares. spot bitcoin, let alone the Rivers, Swans And Coin bases,” he added.

Thorn also pointed out the macroeconomic factors that determine Bitcoin’s attractiveness. He noted growing recognition among financial leaders, such as Jamie Dimon and Jay Powell, about the unsustainability of the U.S. national debt, which has traditionally been a position of gold advocates.

This realization has made it an increasingly attractive investment.

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

Bitcoin ETFs and Corporate Bonds

Addressing the potential impact of spot Bitcoin ETFs on corporate bonds, Thorn drew parallels with the gold market after 2006, following the approval of the first gold ETF.

While he acknowledged Bitcoin’s historic four-year boom and bust cycles, he suggested that current interest is driven by more sophisticated factors than in the past.

“It’s not just a wave of people hearing about Bitcoin for the first time,” Thorn said, implying a deeper, more strategic interest among investors.

Thorn noted a growing curiosity among long-term investors such as savings and pensions, who are returning to Bitcoin after initial hesitations.

These investors, with a longer time horizon, see bitcoin as a hedge in a volatile risk environment, according to Thorn.

“Bitcoin straddles the gap between risk and hedging,” Thorn explains, indicating that while Bitcoin is not yet traded as a mainstream hedge, its perception is evolving.

Generational shifts and future adoption

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

Thorn acknowledged that older generations are often reluctant to embrace new technologies. However, he noted that the introduction of spot Bitcoin ETFs could ease this transition by simplifying access.

“The younger generations are adopting more innovation (rapidly),” Thorn noted, before adding that as wealth is transferred to younger generations who are more familiar with bitcoin, adoption rates may increase.

Thorn also emphasized the role of financial advisors in this transition.

Many people rely on advisors to manage their investments, and as spot Bitcoin ETFs become available on wealth management platforms, advisors can introduce bitcoin into their clients’ portfolios. This could create a significant influx from older demographics who might otherwise be reluctant to engage directly with the asset.

In conclusion, Alex Thorn’s insights from the conference underline Bitcoin’s multifaceted future.

Whether it is a treasury bill, a technological instrument or a macroeconomic hedge, Bitcoin’s role is increasing.

As generational shifts occur and Bitcoin ETFs become more common, Bitcoin adoption among both corporations and individual investors is poised to grow.

Leave a Comment