Bitcoin lenders might have to grow to be more like conventional finance corporations, not much less, in the event that they want institutional capital to maintain flowing into the sector.
At Consensus 2026 in Miami, Alexander Blume, founder and CEO of institutional bitcoin lender Two Prime, argued that the following stage of crypto credit development will rely much less on decentralized finance experimentation and more on standardization, transparency, and danger administration.
“The moment you start trying to explain how any of this stuff works, they’re just like, No… We’ll pay more. Don’t lose my money,” Blume mentioned, referring to institutional debtors evaluating crypto lending merchandise that grow to be troublesome to defend in periods of market stress.
The feedback mirrored a broader post-2022 shift in crypto lending following the collapses of Celsius, Voyager, and BlockFi, when opaque leverage, aggressive rehypothecation, and weak danger controls triggered a wider credit disaster throughout the business. In the years since, many institutional debtors have moved away from complicated DeFi buildings in favor of merchandise centered on clear custody, standardized contracts, and clearly identifiable counterparties.
Across the panel, audio system repeatedly recommended that institutional finance and crypto-native finance stay essentially misaligned of their approaches to danger. While DeFi developed round permissionless entry, composability, and capital effectivity, institutions proceed to prioritize predictability, authorized accountability, and operational simplicity.
That stress was particularly seen within the dialogue round rehypothecation, the follow of reusing buyer collateral to generate further yield, which turned one of many defining dangers uncovered throughout the 2022 lending collapse.
“The most important thing to ask… is where is your Bitcoin stored,” mentioned Adam Reeds, co-founder and CEO of Ledn.
Jay Patel, co-founder and CEO of Lygos Finance, mentioned debtors more and more want to “underwrite the lender” themselves earlier than taking loans towards their bitcoin holdings.
“The biggest point in my mind is definitely the rehypothecation piece,” Patel mentioned.
Blume mentioned institutional debtors typically reject crypto-native lending buildings not as a result of they oppose bitcoin, however as a result of the operational complexity surrounding many DeFi techniques stays troublesome to justify to boards, shareholders, and danger committees.
At one level, Blume distilled the divide between crypto-native finance and institutional finance right into a single remark.
“Our whole financial system is set up to have someone else to blame,” he mentioned, arguing that institutional debtors nonetheless want identifiable intermediaries, standardized processes, and authorized accountability over totally autonomous monetary techniques.
For many lenders on stage, the way forward for crypto credit not seems tied to making finance more decentralized. Instead, it might rely upon convincing institutional debtors that bitcoin-backed lending can behave predictably sufficient to resemble the standard system they already belief.