Bitcoin Was the Asset. Now Institutions Are Building Around It

Bitcoin Becomes the Basis for New Financing

Bitcoin is becoming the foundation for a wider set of financial products, according to TD Cowen’s account of the Sept. 28 Bitcoin Treasuries Conference in New York. TD Cowen is a division of TD Securities. Its equity analyst Lance Vitanza, CFA, examined discussions of capital formation, collateral, and funding structures in a Sept. 29 sector note titled “Three Themes Shaping the Next Phase of Institutional Bitcoin Adoption.”

Vitanza wrote:

“The conversation is moving beyond bitcoin ownership and toward the ecosystem being built around it: capital markets, implementation frameworks, and institutional infrastructure.”

Conference participants discussed bitcoin-backed bonds, preferred shares (stock with priority over common shares for dividends), convertible securities (instruments that can be exchanged for shares under specified terms), and financing for companies that hold bitcoin in their treasuries. What stood out to TD Cowen was not that these structures exist, but that participants now appear to assume their continued development.

Some financing structures are already active. Strategy Inc. (Nasdaq: MSTR) disclosed on Sept. 28 that it had bought another 1,665 BTC and repurchased $152 million of its STRC preferred stock. Its preferred shares give investors exposure to a company whose balance sheet is dominated by bitcoin, with terms and risks that differ from owning the cryptocurrency directly.

That distinction becomes more consequential as companies issue several types of securities against the same treasury. Strategy’s internal measure of bitcoin asset coverage assigns different thresholds to its preferred shares. The measure illustrates the company’s capital structure, but it is neither an external credit rating nor a measure of cash available to pay dividends.

The Question Shifts to How Institutions Hold Bitcoin

Institutional discussions at the conference also turned to practical choices: how bitcoin fits in a portfolio, whether to use an exchange-traded fund or self-custody, in which an owner controls the private keys used to authorize transfers, and how a company should operate a bitcoin treasury. TD Cowen reported that Blackrock representatives viewed ETFs and self-custody as complementary approaches serving different investors. Blackrock’s Ishares Bitcoin Trust offers price exposure through a traded product, reducing the need for shareholders to manage private keys themselves.

The machinery supporting those products is changing as well. In July 2025, the Securities and Exchange Commission (SEC) permitted in-kind creation and redemption for crypto exchange-traded products. The decision lets authorized participants, financial firms that transact directly with the funds, exchange eligible crypto assets for fund shares, or shares for assets, instead of relying solely on cash transactions. It concerns how those firms transact with the funds.

Lending is another area where the discussion is advancing ahead of broad implementation. Strategy Executive Chairman Michael Saylor has proposed rules that would let banks custody bitcoin and lend against it. Under such a loan, an owner would pledge bitcoin as collateral while retaining exposure to price changes. Banks would still need to manage the risk of a decline in the collateral’s value.

The conference agenda extended beyond investment products. Participants also addressed estate planning, advisory allocation frameworks, and the operating procedures companies need when bitcoin becomes part of their treasury. TD Cowen viewed those questions as evidence that institutional discussion is moving toward implementation.

Privacy and Security Enter the Institutional Debate

Every bitcoin transaction appears on a public ledger, allowing specialist firms to monitor large transfers by institutions. TD Cowen described a conference presentation on businesses that identify and analyze these movements. According to the speaker, analysis of bitcoin’s public transaction history may allow them to infer trading intentions, transfers between custodians, or decisions about where to deploy capital. This visibility can give other market participants clues about a large holder’s activity while the institution is carrying out its strategy.

The note also describes growing attention to custody controls, insurance, and preparations for quantum computers powerful enough to undermine the digital signatures that protect bitcoin. Panelists discussed that threat as a question of long-term planning and Bitcoin governance, rather than an imminent failure. Fidelity Digital Assets Research has examined the technical trade-offs of a possible security upgrade, including the larger signatures that some quantum-resistant designs would require.

The privacy presentation raised off-chain settlement, coin swaps, and zero-knowledge technology as possible ways to limit information revealed by transactions while accommodating regulatory requirements. TD Cowen presented them as proposals discussed at the conference, leaving their adoption and effectiveness open.