Bitcoin lenders may need to look more like traditional financial firms, not less, if they want institutional capital to continue flowing into the sector.
At Consensus 2026 in Miami, Alexander Blume, founder and CEO of institutional bitcoin lender Two Prime, argued that the next stage of crypto lending growth will depend less on experimentation with decentralized finance and more on standardization, transparency and risk management.
“The moment you start trying to explain how this all works, they just say: No… We’ll pay more. Don’t waste my money,” Blume said, referring to institutional borrowers evaluating crypto lending products that become difficult to defend during periods of market stress.
The comments reflect a broader shift in crypto lending after 2022, following the collapses of Celsius, Voyager and BlockFi, when opaque leverage, aggressive remortgaging and weak risk controls triggered a broader credit crisis across the sector. In the years since, many institutional borrowers have abandoned complex DeFi structures in favor of products focused on transparent custody, standardized contracts, and clearly identifiable counterparties.
On the panel, speakers repeatedly suggested that institutional finance and crypto-native finance remain fundamentally misaligned in their approaches to risk. While DeFi has evolved around permissionless access, composability, and capital efficiency, institutions continue to prioritize predictability, legal accountability, and operational simplicity.
This tension was particularly visible in the discussion around remortgaging, the practice of repurposing customer collateral to generate additional yield, which became one of the defining risks exposed in the 2022 lending collapse.
“The most important thing to ask… is where your Bitcoin is stored,” said Adam Reeds, co-founder and CEO of Ledn.
Jay Patel, co-founder and CEO of Lygos Finance, said borrowers are increasingly having to “guarantee the lender” themselves before taking out loans against their bitcoin holdings.
“The most important point on my mind is definitely the issue of remortgaging,” Patel said.
Blume said institutional borrowers often reject crypto-native lending structures not because they oppose bitcoin, but because the operational complexity surrounding many DeFi systems remains difficult to justify to boards, shareholders and risk committees.
At one point, Blume summed up the divide between crypto-native finance and institutional finance in a single observation.
“Our entire financial system is designed so that someone else is to blame,” he said, arguing that institutional borrowers still prefer identifiable intermediaries, standardized processes and legal accountability to completely autonomous financial systems.
For many lenders on stage, the future of crypto credit no longer seems linked to more decentralized finance. Instead, it may require convincing institutional borrowers that Bitcoin-backed loans can behave predictably enough to resemble the traditional system they already trust.
