Summing Up The Case For Bitcoin As The Future Of Collateral

Tony "The Bull" Severino

1 year ago

3 mins read

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Today, a report was released by Arcane Research in partnership with Bitcoin trading platform Bitstamp outlining the case for BTC as the future of collateral in the finance world.

The nearly 70-page report deep dives into the various reasons as to why this is, and how they see it coming to be. Here’s a summarized version ahead of digging into the report further to learn more.

The Many Use Cases Of Cryptocurrency

Bitcoin, like the internet in many ways, is a blank canvas. It is the technology for which developers can build upon, and the creative can utilize and implement in a variety of ways.

Revolutionary technologies like the two don’t come along very often, and when they do how they fit into everyday life isn’t always clear. And even when use cases are obvious, other uses emerge as time goes by and the users of the technology find other ways to apply it.

When Bitcoin first began it was pitched as the first form of cryptographically-secure digital cash. From its early days, the asset has transformed into more of a store of value, a speculative asset for trading, and a compelling digital currency that could potentially disrupt many facets of finance.

Where it goes next is hard to tell exactly, and could take many forms. Some see the cryptocurrency becoming the global reserve asset, while Arcane Research’s report points to Bitcoin taking over the collateral market, and here’s why.

Only over the last year have institutions realized the potential of Bitcoin | Source: BTCUSD on TradingView.com

Bitcoin “Perfect” To Become The Global Collateral Asset

Because of the asset’s potential and seemingly unlimited use cases, it makes for perhaps the greatest speculative asset historically. Due to that, it trades with wild volatility that’s caused it to be especially attractive with derivates traders. And that’s where a new use case has unexpected blossomed.

According to Arcane, Bitcoin’s use as collateral has been essentially bootstrapped by the derivatives market due to digital portability, acting as a proof of concept for other collateral cases.

The report goes on to call Bitcoin the “perfect” collateral asset for reasons beyond portability, however. Other reasons for this claim include the fact the asset cannot be seized and is therefore free of counterparty risk, and it trades globally, 24/7 across all borders.

Bitcoin’s use as collateral in DeFi applications is also growing thanks to Wrapped BTC. The overall use in all collateral applications from DeFi to derivatives and then some, is anticipated to reach 1,000,000 BTC by 2023.

The collateral market is currently a $20 trillion market just waiting to be tapped into by Bitcoin. While not everyone might have saw this use case coming, it is certainly one the asset could serve, and would ultimately benefit investors and the ecosystem both.

Featured image from Deposit Photos, Charts from TradingView.com

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.

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