Bitcoin treasury executives see a $3 trillion opportunity in digital credit, a fast-growing class of bitcoin-backed debt instruments. The market has already grown to about $10 billion in less than a year, participants said at Consensus Miami.
Matt Cole, Chairman and CEO of Strive, said digital credit is experiencing exponential adoption, noting it's the second fastest product launch in capital markets history after bitcoin ETFs. The global credit market is worth $300 trillion, and capturing just 1% would represent $3 trillion in demand.
Digital credit is a new type of income-generating security backed by bitcoin, designed to let investors earn yield while reducing exposure to bitcoin's price swings. These instruments are typically structured as perpetual preferred stocks with no fixed repayment date.
Strategy pioneered the category last year, followed by Strive. Katherine Dowling of Bitcoin Standard Treasury Company said her firm is actively looking at digital credit. Amanda Fabiano of Nakamoto said her firm built a fund on top of the trend.
Kwasi Kwarteng, executive chairman of Stack and former UK Chancellor, said the scope for growth is enormous, with only about 200 bitcoin treasury companies compared to 5,000 banks in the US alone. He framed it as a binary choice: "Either you believe bitcoin is going to the moon or you believe it's a Ponzi scheme. There's no middle ground."