Acceleration of Bitcoin Institutionalization: The landscape of corporate finance changed significantly in fiscal year 2025

Mr. Michael Saylor (Founder and Chairman of Strategy) emphasizes that the true value of Bitcoin lies not in short-term price fluctuations but in its fundamental acceptance within the financial system. The fiscal year 2025 has been a year of multiple historic turning points, including the revival of insurance, a shift in accounting principles, and integration with the banking system. Positioning Bitcoin as a corporate balance sheet strategy reflects a shift toward a “universal capital” in the digital age, rather than mere speculative activity.

Rapid Development of Institutional Infrastructure: Key Progress in FY2025

A detailed look at the changes in FY2025 reveals a dramatic transformation in the environment surrounding Bitcoin. According to Mr. Saylor, the milestones achieved this year are as follows:

Revival of insurance coverage was the first major turning point. When Mr. Saylor purchased Bitcoin through Strategy in 2020, insurance companies had canceled policies, and the company’s insurance liabilities had to be covered by personal assets for over four years. This institutional barrier was resolved in 2025.

Simultaneously, the introduction of fair value accounting allowed companies to recognize unrealized gains. Previously, firms faced issues related to unrealized capital gains taxes on Bitcoin holdings, but proactive government guidance resolved these tax challenges in 2025. As a result, multiple companies saw improved earnings.

Official recognition by the government was also a significant turning point. The US government officially designated Bitcoin as the most important global digital commodity, accelerating a change in attitude within the banking sector.

Integration into Banking Systems and Maturation of Market Infrastructure

The response speed of financial institutions accelerated beyond expectations. At the beginning of the year, only about 5 cents of loans could be secured against $1 billion worth of Bitcoin collateral. By the end of the year, nearly all major US banks had begun offering loans collateralized by IBIT (Bitcoin spot ETF), and about 25% of banks announced the launch of Bitcoin-backed lending programs.

The Treasury Department also issued positive guidance regarding the inclusion of cryptocurrencies in bank balance sheets. The leadership of the US Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) also expressed support for Bitcoin and cryptocurrencies.

Commercialization of market infrastructure progressed in parallel. The Chicago Mercantile Exchange (CME) advanced the commercialization of Bitcoin derivatives markets, and a new non-taxable physical exchange mechanism between IBIT and Bitcoin was introduced. This system allows institutional investors and corporations to exchange IBIT and Bitcoin tax-free in units of $1 million.

Clear changes were also observed in corporate Bitcoin holdings. The number of companies holding Bitcoin on their balance sheets, which was about 30–60 in 2024, expanded to approximately 200 by the end of FY2025.

Bitcoin as a Corporate Balance Sheet Strategy

Mr. Saylor describes the strategy of corporate Bitcoin purchases as “equivalent to installing power infrastructure.” It is viewed not merely as a speculative asset but as a rational tool for increasing productivity.

For example, a company might record a $10 million loss annually but hold $1 billion worth of Bitcoin, generating $300 million in capital gains. The point is that the issue is not Bitcoin purchases but rather ongoing operational losses. He argues that it should be criticized only if a loss-making company does not hold Bitcoin.

The positioning of “Bitcoin as universal capital in the digital age” underpins this strategy. Just as electricity is a universal capital that powers all machinery, Bitcoin is believed to serve a similar role in the digital economy.

Growth Potential of Market Size and Industry Discussions

There are concerns about whether the market can handle the increasing corporate Bitcoin purchases. In response, Mr. Saylor emphasizes that while there are about 400 million companies worldwide, only around 200 currently hold Bitcoin. He argues that the concern about the market being unable to cope is a typical overreaction at an early stage.

Regarding industry criticism of Bitcoin-related companies, Mr. Saylor offers a different perspective. He notes that 99% of Bitcoin supporters agree with new corporate models and adoption methods, with only 1% opposing, based on his observations.

Strategy’s Vision: Developing a Digital Credit Market

Strategy’s business model aims not at traditional banking but at building a “digital credit” market based on Bitcoin as capital. The company’s core philosophy can be summarized as “Bitcoin is digital capital, Strategy is digital credit.”

According to Mr. Saylor, the potential scale of the digital credit market is enormous. In a market environment where thousands of companies issue senior and corporate credit, there are almost no Bitcoin-collateralized derivatives exchanges or insurance products. Currently, the number of insurance companies utilizing Bitcoin as collateral or capital is close to zero.

To enhance corporate creditworthiness, Strategy employs a strategy of holding US dollar reserves. Since buyers of credit products are concerned about high volatility, holding dollar reserves is intended to strengthen the balance sheet’s credit profile and increase the attractiveness of the products.

Mr. Saylor explicitly states the potential for business expansion. Just because a certain business has not yet been implemented does not mean it cannot be done; future potential should be reflected in stock valuation. If we imagine ideal products with a 10% dividend yield and a price-to-book ratio of 1 to 2, capturing 10% of the US Treasury bond market could result in a potential market size of $10 trillion.