Bitcoin's (CRYPTO: BTC) current downturn may be painful, but Strive (NASDAQ:ASST) executive Matt Cole says the asset is already in a bottoming process and that new BTC-backed credit products could make future bear markets less severe.

Digital Credit As A New Bitcoin Bid

Speaking on the Bitcoin Magazine Podcast on June 10, Cole described the latest Bitcoin selloff as a “classic” but relatively mild bear market.

“The fundamentals around Bitcoin have never been stronger,” Cole said, pointing to growing institutional adoption, ETF distribution through retirement accounts, improving regulation and the rise of digital credit products.

Cole expects Bitcoin could move back above $80,000 and potentially return to six figures later this year.

BTC-backed digital credit products represent a new source of capital entering the ecosystem as the demand for these instruments is not primarily coming from investors selling Bitcoin, but from fresh capital seeking yield.

Strive’s (NASDAQ:SATA) pays a 13% dividend, while Strategy’s (NASDAQ:STRC) pays 11.5% and these yields can help investors beat fiat debasement while gaining exposure to Bitcoin-backed balance sheets.

According to Cole, retail investors and independent financial advisers have led early adoption, similar to how retail investors embraced Bitcoin before institutions.

Fiat System ‘Has Terminal Cancer‘

Cole noted the long-term case for Bitcoin remains rooted in the failure of fiat currencies and rising debt burdens.

"The fiat system, I think, has basically terminal cancer," he said.

He argued that fixed income and the traditional 60/40 portfolio are structurally challenged because investors are buying debt during a debt crisis.

Digital credit, in his view, could become a replacement for part of the income sleeve in portfolios by offering yield without relying on traditional government or corporate debt.

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