UTXO's Dan Hillery Sees Bitcoin (BTC) Digital Credit Market Reaching $1.5 Trillion

Bitcoin (BTC) Digital Credit Nears $16B

The digital credit market built on Bitcoin (BTC) holdings has grown to roughly $16 billion, and Dan Hillery, who oversees the credit business at UTXO Management, argues it could one day rival the network's own $1.5 trillion market capitalization. Hillery set out the projection in an interview published Wednesday, September 17, describing Bitcoin-backed credit as the fastest-expanding layer of the asset's capital structure. Two years ago, by his own account, this market barely existed at all.

The market is taking shape around corporations that hold Bitcoin on their balance sheets and issue preferred securities and structured financial products against those holdings. The two products Hillery singled out are Strategy's STRC and Strive's SATA, both variable-rate preferred shares whose coupons adjust with market conditions. That design, he noted, has no real precedent in market history. The monetization conversation around strategic bitcoin reserves held by corporations and even nation-states is also migrating, in his view, from centralized lending desks toward on-chain structures — a shift that overlaps with the broader growth of Bitcoin DeFi. For context on how far the asset's financialization has traveled, our coverage of Bitcoin capital-markets developments has tracked this buildout across the past year.

$100 Par and the Buyback Anchor

A central mechanic in the interview concerns pricing. Both STRC and SATA tend to trade around their $100 par value, and Hillery attributes that stability to a self-reinforcing loop: issuers and market participants buying back the shares in the open market pin the price near par. He was careful to add that neither the price nor the dividend structure depends on Bitcoin's price alone — the issuer's capital structure and liquidity position shape both. The rates on these instruments, in other words, sit in the same sensitive zone as broader dollar funding costs, a point Grayscale made recently when it argued the Fed's 3.75%-4.00% hike was a mid-cycle move that won't derail Bitcoin. Hillery also drew a line investors frequently blur: digital credit risk is not digital equity risk. Preferred holders are exposed to a relatively fixed dividend and redemption schedule, while common shareholders absorb Bitcoin price swings and the issuer's capital-raising decisions more directly. If Bitcoin flattens or falls, he said, analysts should watch collateral coverage, the issuer's funding capacity, and whether preferred dividends remain sustainable together — not any one of the three in isolation.

On the fund side, he walked through the structured credit vehicle UTXO is building, split into senior and junior tranches that carry deliberately different risk and return profiles, with leverage sourced and volatility risk transferred between them. He attributed the absence of major fund classes from this market to two gaps: insufficient understanding of the product structures and limited market access. Over the next five years, he expects short-duration Bitcoin-backed notes and additional structured products to emerge, with actual launches hinging on each issuer's funding capacity. Readers tracking the market in real time can follow live spot and futures prices on Gate.

A Capital-Structure Shift, Not a Cycle Trade

Our reading is that the two threads of this interview point to one arc: Bitcoin is acquiring a full capital stack — equity, preferred credit, and structured tranches — on top of a base asset whose scarcity is fixed by the halving schedule. The primary record here is Hillery's own on-the-record statements and UTXO's disclosed fund structure, which together put a $16 billion number on a market that did not exist two years ago and frame $1.5 trillion as its long-run ceiling. The binding constraints, per that same record, are issuer solvency and product literacy — variables worth tracking as Bitcoin-backed paper multiplies.