Veteran crypto investor Willy Woo shared his insights during the Baltic Honeybadger conference in Riga regarding Bitcoin's potential as an asset against traditional financial instruments.
Potential for Bitcoin to Change the Financial System
Woo believes that Bitcoin has the potential to revolutionize the global financial system, but for that to happen, it needs to rival traditional stores of value such as gold and the US dollar. Currently, Bitcoin's market capitalization stands at $2.42 trillion, just over 10% of gold's $23 trillion market cap and significantly behind the US dollar's $21.9 trillion money supply. Woo stated, 'You don’t get to change the world unless this monetary asset… gets big enough to rival the US dollar.'
Risks of a Bitcoin Treasury Bubble
Woo also identified two major obstacles that could hinder Bitcoin’s path to becoming a world reserve asset. First, while BTC treasury adoption is accelerating, little is publicly known about how these firms structure their debt. This lack of transparency could lead to a 'Bitcoin treasury bubble,' where weaker players collapse, wiping out investor funds. Additionally, Woo highlighted risks during bear markets, when financially vulnerable companies might be forced to liquidate their holdings. 'What happens in the bear market? Who’s swimming naked and how many coins get slapped back out into the market?' Woo questioned.
Nation-State Risks and Self-Custody Concerns
Woo raised concerns about the increasing reliance on spot Bitcoin ETFs, pension funds, and institutional custodians like Coinbase. While these vehicles attract substantial inflows, they also concentrate BTC in custodial arrangements that may be vulnerable to government interference. Meanwhile, Max Kei, CEO of Bitcoin self-custody platform Debifi, predicted that self-custody would gradually expand—starting with corporate custodians, then extending to everyday businesses, and eventually to individuals. On the same panel, Blockstream CEO Adam Back argued that companies remain the most logical entry point for large-scale Bitcoin adoption.
The viability of Bitcoin as an asset hinges on increased capital investment and addressing various risks, including transparency issues and dependency on institutional custodians. These concerns require community attention to ensure Bitcoin can confidently compete with traditional valuable assets.
