Bitcoin vs. Cash: How Scarcity Shields Your Savings and Unlocks Working Capital
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Last updated on May 6th, 2025 at 12:01 am
Read Time:6 Minute, 8 Second
You worked hard for your cash. So why does it buy your business less every year?
Cash Isn’t Safe — It’s a Liability
I completely understand that this is a bold statement.
But hear me out on why Bitcoin is a solution.
Small businesses are taught to hold cash reserves for a rainy day. When I worked in banking as a commercial credit underwriter, the first thing I looked at when reviewing any business was how much cash it had on its balance sheet.
Why?
Because to a bank, more cash = less risk.
The company could manage a rough business cycle, cover daily operating expenses without selling off assets, and comfortably repay its loan obligations.
So, more cash looks excellent on the balance sheet from the perspective of a debt investor because they know odds are better that they will get their money back!
But what happens when the value of that cash is shrinking year after year?
Well, a few things happen.
Inflation eats into your working capital.
Banks tighten credit conditions during downturns, making it more challenging to get a loan.
And holding cash provides zero upside, while costs rise around you.
If your treasury strategy relies entirely on fiat currency, you’re playing defense in a game rigged against you.
💡Bankers’ Insight: How We Evaluated Cash.
When I was in banking, the way that we would assess prospective customers’ cash position was by their “Days Cash on Hand” or DCOH. This was taking the cash available and dividing it by annual operating expenses, then multiplying by 365.
Depending on your industry 60-90 days could be, sufficient some may require more. Its important to figure out how much cash you want to keep on hand at all times before investing capital anywhere else! Below we’ll talk about the problem with holding too much cash.
The Cash Trap: Declining Value, Rising Costs
Fiat currency is inflationary by design. Central banks print it endlessly, governments spend it recklessly, and your dollar constantly buys less.
Let’s break it down:
The U.S. dollar has lost 85% of its purchasing power since 1971.
Post-COVID stimulus added trillions to the money supply.
And interest rates? Higher than they’ve been in 20+ years — but still not outpacing inflation long-term.
Holding a large amount of cash doesn’t protect you as a small business or entrepreneur on any of these fronts.
So what’s the flip side?
Too much idle cash = missed opportunity.
From the perspective of an equity investor (shareholder), you would not want the business you’ve invested in to sit on too much cash. Because that money could be used to invest in new projects, expand operations, and create more shareholder value.
In other words, cash is meant to be deployed (invested in some fashion), not hoarded.
Bitcoin is a win-win solution for the business and its investors in the long term.
Enter Bitcoin: A Deflationary Treasury Asset
Unlike fiat, Bitcoin has a hard cap of 21 million coins. No more can ever be created. This scarcity makes Bitcoin deflationary, making it more valuable over time as demand increases.
✅ Fun Fact: When central banks print more money, Bitcoin often goes up in response. That’s no coincidence.
That’s why some of the most forward-looking companies, from small startups to public firms, incorporate Bitcoin into their balance sheets.
But here’s the real unlock:
Bitcoin isn’t just a savings asset — it’s a productive, liquid treasury tool.
The perks of this asset are tremendous.
You can borrow against it without selling it.
Use it to fund working capital needs.
Unlock value without giving up equity. – Shareholders will benefit from the price of Bitcoin, which will increase the value of their business and their shares!
Access financing without a bank
Bitcoin-Backed Loans: How They Work
This is probably one of the most exciting things about this asset. And this is not just a perk that businesses have access to, but individuals as well.
YOU DON’T NEED TO GO TO A BANK FOR FINANCING! This can be a headache if you’ve worked with a bank before, especially as a small business.
You would need to provide years of tax returns for the business and yourself, as well as personal financial statements, credit scores, and personal guarantees on the loan.
Even then, depending on how much risk the bank views you as, there may be some restrictive covenants telling YOU, THE BUSINESS OWNER, what you can and cannot do with your business.
Now, imagine a self-financing model where:
✅ No credit checks
✅ No underwriting delays
✅ Global access, 24/7
✅ Bitcoin is your collateral
That’s precisely what Bitcoin-backed lending enables.
Here’s how it works:
You secure your Bitcoin in a multisig or lending platform wallet
You borrow 30–60% of its value in stablecoins or USD
You repay on your terms — no bank approvals, no gatekeepers
Your Bitcoin remains yours, preserving upside as it appreciates over time
You don’t have to go all in. Just start building the habit — and your balance sheet.
Don’t Let a Melting Treasury Sink Your Growth
You wouldn’t run your business on dial-up internet in the fiber optic era…. Right?
Why run your business on melting money?
Not with gigabit speeds available with the introduction of fiber optic internet. Like internet speeds, your business and/or personal finances deserve an upgrade. It’s the 21st century, let’s all live in it.
Bitcoin gives you access to a modern treasury strategy: a deflationary store of value, a collateral asset for instant liquidity, and a path to financial independence from banks.
What’s Next?
Next week, we’ll discusshow to store Bitcoin securely, whether you’re holding $500 or $500,000.
💬 Have questions? Drop them in the comments or reply directly to the newsletter.
📥 Want weekly insights like this? Join the Wealth Impact Journal mailing list. And if you’re a small business owner curious about Bitcoin-backed lending or treasury strategy, stay tuned — this is just getting started.
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