Bitcoin for your average investor seems like a extremely volatile asset with a concept hard to grasp when it fixed limitability and the blockchain technology itself. So having the historical reference to gold as the comparison where it is very similar in terms of focus on holding for longer periods of time. Now some will argue on the stability in terms of the digital gold (BTC) being way more volatile then the traditional gold but bitcoin still in terms of amount of time its existed has a long way to go, advancing alongside our advancing digital economy.  What makes the digital asset  so unique is situations like this where  the bigger banks and financial institutions like Newmarket Capitals CEO Andrew Hohns is bringing Bitcoin loans/collateral to the forefront of when it comes ways to use this asset other than just holding it, and soon to be lending. (Credit to Video CNBC TV 11/22/2024 Air Date)

Key Points from Hohns’ Explanation:

  1. Loan Structure: A classic loan is provided in cash, secured by both a traditional asset (e.g., real estate) and Bitcoin. For example, a recent $2 million loan was backed by a 63-unit apartment building and 20 Bitcoins.
  2. Risk Mitigation: Including Bitcoin as part of the collateral reduces reliance on a single asset (like property), mitigating idiosyncratic risks such as maintenance issues. The expectation is that Bitcoin’s long-term value appreciation offsets its short-term volatility.
  3. Flexibility: Borrowers can repay the loan at any time without penalties. However, Bitcoin collateral must remain in escrow for at least four years, ensuring stability during the loan’s early term.
  4. Returns and Fiduciary Use: Historical data suggests holding Bitcoin for four years has consistently yielded positive returns, making it a potential tool for pension funds and other fiduciaries to close asset-liability gaps.

This novel approach combines the stability of tangible assets with Bitcoin’s growth potential, offering a transformative solution for modern lending and portfolio strategies