If Bitcoin lenders want institutional capital to continue flowing into the industry, they may need to become more like traditional financial companies, not less.
Speaking at the Consensus 2026 conference in Miami, Alexander Blume, founder and CEO of institutional Bitcoin lender Two Prime, argued that the next phase of cryptocurrency credit growth will rely less on decentralized finance experimentation and more on standardization, transparency and risk management.
“The minute you start trying to explain how these things work, they’re like, no… we’re going to pay more. Don’t lose my money,” Bloom said, referring to institutional borrowers evaluating crypto loan products that have become difficult to defend during periods of market stress.
The comments reflect a broader shift in crypto lending following the collapse of Celsius, Voyager and BlockFi in 2022, when opaque leverage, aggressive rehypothecation and weak risk controls triggered a broader credit crisis across the industry. In the years since, many institutional borrowers have abandoned complex DeFi structures in favor of products centered on transparent custody, standardized contracts, and clearly identifiable counterparties.
Throughout the panel, speakers repeatedly stated that institutional finance and crypto-native finance remain fundamentally inconsistent in their approach to risk. While DeFi evolves around permissionless access, composability, and capital efficiency, institutions still prioritize predictability, legal liability, and operational simplicity.
This tension is particularly evident in discussions around rehypothecation, the practice of reusing customer collateral to generate additional yield, which emerged as one of the defining risks exposed during the 2022 lending collapse.
“The most important question is…where are your Bitcoins stored,” said Adam Reeds, co-founder and CEO of Ledn.
Jay Patel, co-founder and CEO of Lygos Finance, said borrowers are increasingly required to “underwrite a lender” themselves before they can take out a loan against their Bitcoin holdings.
“The biggest thing in my mind is definitely the remortgage part,” said Patel.
Blume said institutional borrowers often reject crypto-native lending structures not because they are opposed to Bitcoin, but because the operational complexity of many DeFi systems remains difficult to justify to boards, shareholders and risk committees.
At one point, Bloom distilled the divide between crypto-native finance and institutional finance into a single observation.
“Our entire financial system is set up to put others to blame,” he said, arguing that institutional borrowers still prefer identifiable intermediaries, standardized processes and legal accountability to a fully autonomous financial system.
For many lenders on the stage, the future of crypto credit no longer seems to be tied to making finance more decentralized. Instead, it may depend on convincing institutional borrowers that Bitcoin-backed loans can behave predictably enough to resemble the traditional systems they already trust.
