Why Bitcoin’s Liquidity Advantage Matters as Institutions Move In

The portability, divisibility, and accessibility of Bitcoin could increasingly set it apart from conventional stores of value as a greater number of institutions enter the marketplace, according to Shawn Owen, who serves as the CEO and Co-Founder of SALT Lending.

During an appearance on BMTV, Owen highlighted the strength of Bitcoin while gold and various other long-duration assets experienced sell-offs, asserting that a few fundamental attributes of Bitcoin grant it clear advantages over competing assets.

“It is easier to buy Bitcoin than gold,” Owen stated.

This particular advantage becomes even more pronounced when physical mobility is critical.

“It’s easier to move Bitcoin out of, say, somewhere where you need to leave quickly because there’s unrest in the area than gold,” Owen noted. “It’s far more portable and divisible and easy to use than real estate.”

Bitcoin’s Liquidity Advantage

Real estate, gold, and bitcoin are all capable of functioning as long-term stores of value, yet the processes of accessing and transferring that wealth differ significantly.

Physical gold demands secure storage and physical transportation. Real estate remains bound to a fixed geographic location and can require considerable time to buy or sell. Conversely, Bitcoin can be transferred across the globe and broken down into minor units without encountering those physical limitations.

These specific traits can additionally afford Bitcoin owners enhanced flexibility whenever they require liquidity.

Rather than liquidating their bitcoin to obtain US dollars, owners can potentially utilize it as collateral to borrow against its worth while keeping their ongoing exposure to the underlying asset intact.

Such a model gains specific relevance if Owen’s extended outlook concerning Bitcoin adoption turns out to be accurate.

Institutional FOMO Is Arriving

Owen is convinced that the journey many individual Bitcoin participants have already gone through—discovering Bitcoin and wishing they had participated sooner—will eventually manifest among much larger institutions.

“Every human goes through this experience where you learn about Bitcoin and wish you’d been earlier,” Owen mentioned. “I think that will be true of sovereigns and banks and institutions of all sizes.”

Traditional banks have taken substantially longer to penetrate the market, but Owen is of the opinion that this trend is shifting as numerous obstacles surrounding Bitcoin have been successfully resolved.

“Banks have been slow, but are now getting in after all the boxes have been checked,” he said. “FOMO is real.”

Owen warned that price appreciation and widespread adoption will not necessarily follow a linear path. As Bitcoin matures and additional capital flows into the space, he anticipates a moderate reduction in its historical volatility levels.

That expectation does not alter his long-term perspective.

“Adoption depends on the time horizon we’re talking about,” Owen explained. “Dampening of volatility, and we will continue to see that, but that doesn’t mean over the next decade we won’t see serious adoption and increase in price.”

“Never Sell Your Bitcoin”

This long-term viewpoint also guides how Owen suggests holders ought to manage their bitcoin holdings.

“I have always said never sell your bitcoin,” Owen stated. “Long term we will continue to see prices increasing significantly in comparison to fiat currencies.”

For owners who share that viewpoint, liquidating bitcoin to finance a major purchase, corporate expenditure, or another liquidity requirement involves giving up future exposure to the specific bitcoin they part with.

Bitcoin-backed borrowing presents an alternative strategy.

SALT permits qualified borrowers to employ bitcoin as collateral to secure cash without needing to sell the underlying bitcoin itself. Once the borrowed funds are fully repaid, the collateral is sent back to the borrower.

This framework aligns closely with Owen’s overarching thesis. If Bitcoin keeps advancing in accessibility and gains broader adoption among banks, institutions, and potentially sovereign entities, long-term investors may grow increasingly hesitant to sell simply to fulfill liquidity needs.

Instead, they can potentially safeguard their bitcoin holdings while simultaneously unlocking the economic value stored within them.

As the adoption of Bitcoin broadens, discussions may increasingly shift away from methods of acquiring bitcoin and move toward how participants can utilize their accumulated wealth without necessarily parting with the asset.

SALT Lending is the Official Liquidity Sponsor of BMTV. Learn more about borrowing against your bitcoin and explore SALT’s BMTV offer at https://saltlending.com/bmtv/?utm_source=bmtv&utm_medium=article&utm_campaign=52783658-BMTV%20article&utm_term=BMTV

Disclaimer: SALT Lending is a paid sponsor of BMTV and serves as BMTV’s Official Liquidity Sponsor. This article is sponsored content and does not necessarily reflect the views or opinions of Bitcoin Magazine. The information provided is for promotional purposes and should not be considered financial advice. Readers are encouraged to conduct their own research before making any investment decisions related to Bitcoin or other financial products mentioned herein.

Originally published at https://bitcoinmagazine.com/markets/why-bitcoins-liquidity-advantage-matters-as-institutions-move-in.