Bitcoin is an over $2 trillion asset class. Yet compared to traditional assets, it remains remarkably unproductive. Real estate? Over 60% is mortgaged, fueling everything from homeownership to commercial development. Equities and bonds? Trillions are pledged daily as collateral in repo markets, enabling liquidity across the financial system.

Bitcoin? Only 2-3% is currently collateralized.

This isn't a bug. It's an opportunity. And at BTC Prague 2025, we set out to understand exactly what's holding Bitcoin holders back from unlocking their capital.

We surveyed 349 Bitcoiners about their borrowing and lending behaviors, their concerns, and what would make them comfortable using Bitcoin as productive collateral.

The results paint a clear picture: the demand is there. The trust infrastructure isn't — yet.

The state of Bitcoin borrowing: Still early

74% of respondents are still "just stacking" and have never borrowed against their Bitcoin.

Only 7% have taken out a Bitcoin-backed loan before. This mirrors the early days of any collateral market, before standardised processes, legal frameworks, and trusted infrastructure, most asset holders simply wait and watch.

But here's the fascinating part: when we asked why they would consider borrowing, the use cases were crystal clear:

• 36% would borrow for emergency cash: life happens, and liquidating Bitcoin isn't always ideal

• 20% would borrow for business funding: SMBs and entrepreneurs looking for working capital

• 17% would pay down fiat debt: refinancing high-interest debt with Bitcoin-backed credit

The demand isn't theoretical. It's latent, waiting for the right infrastructure.

The trust barrier: What's holding Bitcoin holders back?

When we asked what prevents people from borrowing against their Bitcoin, three themes dominated:

1. "I don't trust platforms" (The custody problem)

This was the #1 concern among potential borrowers.

After Mt. Gox, FTX, Celsius, and BlockFi, trust in custodial platforms remains at historic lows. Bitcoin holders didn't survive exchange collapses just to hand their keys to another centralised lender.

The lesson: Non-custodial infrastructure isn't a nice-to-have. It's table stakes.

2. Fear of forced liquidation (The volatility problem)

Bitcoin's price volatility is both a feature and a challenge. Holders worry about margin calls and forced liquidations during market drawdowns.

Many respondents cited specific fears: waking up to a liquidation notice, losing their stack during a flash crash, or being unable to respond quickly enough to LTV alerts.

The lesson: Transparent liquidation mechanics, real-time alerts, and fair LTV ratios matter immensely.

3. KYC/Privacy concerns (The sovereignty problem)

For many Bitcoiners, sovereignty isn't negotiable. They want to access liquidity without sacrificing privacy or handing over custody.

Traditional KYC processes feel antithetical to Bitcoin's promise of financial self-sovereignty.

The lesson: Compliance and sovereignty can coexist through collaborative custody models that maintain user control.

The lender's side: Different concerns, same root issue

We also surveyed people interested in lending fiat against Bitcoin collateral. Their top concerns?

1. Counter-party default risk: What happens if the borrower disappears?

2. Low liquidity/exit options: Can I get my capital back when I need it?

3. Regulatory uncertainty: Is this legal? Will it stay legal?

Notice the pattern? Trust infrastructure appears on both sides of the marketplace.

Borrowers don't trust platforms. Lenders don't trust counter-parties. The entire market is waiting for credible, transparent, and secure rails to emerge.

The real problem isn't demand. It's Infrastructure

Here's what our survey makes abundantly clear: Bitcoin credit isn't a product problem. It's a trust infrastructure problem.

The use cases exist. The demand exists. What's missing is the infrastructure that makes Bitcoin credit safe, transparent, and accessible.

This is where Firefish comes in.

How Firefish solves the trust problem

At Firefish, we've processed over $500M in Bitcoin-backed loans for 25,000+ users across the world.

Here's how we're addressing the core concerns our survey revealed:

1. Non-custodial security (addressing "I don't trust platforms")

We use multisig escrow and PSBTs (Partially Signed Bitcoin Transactions) so users never surrender custody. Your Bitcoin stays in a trust-minimized escrow that requires multiple parties to move — eliminating single points of failure.

No black-box custody. No "trust us bro" promises. Just code and cryptography.

We have recently made public our source code. Here's more.

2. Transparent liquidation mechanics (addressing volatility fear)

We provide:

• Real-time LTV monitoring and alerts

• Clear liquidation thresholds with margin calls and alerts

• Ability to top up collateral at any time to maintain healthy LTV ratios

• Conservative LTV ratios

You're never surprised by a liquidation. You're always in control.

3. Peer-to-peer marketplace structure (addressing counter-party risk)

Rather than being the lender ourselves, Firefish operates as infrastructure connecting borrowers and lenders directly in a P2P marketplace.

This means:

• Market-driven interest rates as low as 3% (for certain currencies and tenors - e.g., CHF at 3% for 6 months)

• Lenders accept terms that fit their preferences

• Borrowers set their own terms and preferred rates

• No platform insolvency risk

4. Regulatory compliance without custody (addressing sovereignty concerns)

We've integrated full AML/KYC compliance while maintaining non-custodial architecture. You can be compliant and sovereign.

The evolution from store of value to productive capital

Bitcoin's journey mirrors that of every major asset class before it.

Gold sat in vaults for millennia before becoming the foundation of international banking. Real estate existed long before mortgages made it productive capital. Bonds existed before repo markets enabled trillions in daily liquidity.

Bitcoin is entering Phase 2: from store of value to productive asset.

The survey data confirms we're at an inflection point. The holders are ready. The use cases are clear. What's needed now is to build on the infrastructure to make it happen safely and transparently.