Lending Market: Arcane and Bitstamp Study Brands Bitcoin as the Most Portable Asset in Q4 2020

By: Michael Wilson

Lending Market: Arcane and Bitstamp Study Brands Bitcoin as the Most Portable Asset in Q4 2020

March 5, 2021 4:45 AM

A combined report from a Bitstamp study and Arcane research on the lending market in Q4 2020 highlighted bitcoins' unique qualities.


Bitcoin was branded the "most portable asset" as part of its unique qualities, which could be a contributing factor in the increasing use of the digital asset as collateral. The joint report stated that roughly 420,000 bitcoin were used as collateral in different loans according to the lending market Q4 report.


Data from the study shows that the amount of bitcoin used as collateral in various loans in the lending market in Q4 has almost doubled from its previous year. According to the lending market reports for Q4 2019 which records approximately 213,000 was used as collateral compared to 420,000 used in Q4 2020.


Bitcoin case for best collateral assets took another boost when compared to traditional assets such as "bonds and cash-based securities," which proves the flagship crypto is unmatched. With BTC 24/7 availability for global trading, the study affirms that bitcoin is the only "asset without counterparty risk and credit risk." 


In lauding the superiority of some of Bitcoins qualities, the Arcane Research and Bitstamp study states:


Bitcoin (BTC) ability to be transferred around the world instantly at almost zero cost, with no other assets currently able to match these properties. further solidifies bitcoin place as the perfect collateral asset going forward in the lending market.


However, despite Bitcoin's immense potential. the study suggests the crypto asset can only muster up a negligible share of the total collateral market which stands at $20 trillion today. For instance, Arcane researchers estimated around 625,000 bitcoins being used as collateral in the market which is equivalent to $30 billion. When compared to the total collateral market at $20 trillion, bitcoin merely adds 0.15% of that.


Nonetheless, the research asserts that the Bitcoin share of this market is rapidly growing and the potential for a trillion-dollar market remains a possibility.