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Kelly Kellam, Director at BitLab Academy, said the reversal of SAB 121 will make it easier for banks to lend against Bitcoin, just like they do with real estate.

“If we get the SAB 121 change reversed […] and positive regulatory framework here, banks can now lend against it,” Kellam said. “So rather than having sell pressure in the market when you need to utilize your capital […] you can actually just take out loans against it as the price appreciates.”

Speaking on Roundtable with host Rob Nelson, Kellam believes this will help Bitcoin holders access their funds without selling and paying capital gains taxes.

On Jan. 24, the US Securities and Exchange Commission (SEC) revoked Staff Accounting Bulletin 121 (SAB 121) — a rule that forced banks to treat Bitcoin and other cryptocurrencies as liabilities on their balance sheets.

Bitcoin’s role in finance

Kellam argues that Bitcoin is not a speculative asset but a core financial instrument that should be viewed as less risky than traditional investments.

Kellam pushed back against the notion that Bitcoin is a risky asset. Instead, he sees everything outside of Bitcoin as part of his risk portfolio.

“I would actually push back on one thing you said there, Rob,” Kellam told Nelson. “You said a tremendous sizable amount of your risk portfolio is in Bitcoin. I’m really working as hard as I can to make sure I realize that my risk portfolio is anything outside of not being in Bitcoin.”

Bitcoin-backed loans

The ability to borrow against Bitcoin could change the way people use and invest in the asset, Kellam argues. Instead of selling Bitcoin and paying capital gains taxes, holders could take loans against their BTC holdings, using it as collateral while benefiting from its price appreciation.

Rob Nelson acknowledged this issue, stating, “It’s like owning a house, but you can’t use that asset as value — it’s very constricting.”