Matt Mudano, CEO of Arch, on Bitcoin Momentum, Programmability on Bitcoin, and the Future of Bitcoin DeFi | Ep. 443

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June 3, 2025

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Matt Mudano, CEO and Co-founder of Arch, joined the Cryptonews Spotlight podcast to explain how Bitcoin can evolve from a static reserve asset into the backbone of a global financial system.

From on-chain smart contracts to miner incentives and real-world DeFi, Mudano outlines a vision of Bitcoin that’s more than “digital gold” – it’s programmable capital.

Bitcoin Is Becoming a Strategic Reserve Asset

“Bitcoin is becoming the most successful ETF launch in human history… institutions, governments, corporations are beginning to treat Bitcoin, not just as a speculative asset, but as a strategic reserve asset.”

As traditional players adopt Bitcoin, demand for real financial infrastructure around it is growing. Arch is aiming to power this transformation.

DeFi on Bitcoin Will Unlock Yield and Utility

“The more capital that flows into Bitcoin, the more demand there will be to do something with it. And that’s how reserve assets become active capital.”

Bitcoin isn’t just for holding anymore. Programmability enables lending, stablecoins, structured products, and more.

Bitcoin’s Lack of Programmability Was a Design Choice

“Bitcoin just left it behind and prioritized more things like security and uptime over expressivity.”

Security-first architecture held Bitcoin back from smart contract evolution – until upgrades like Taproot changed the equation.

Arch Enables Native Bitcoin Smart Contracts

“You’re signing Bitcoin transactions that are generated by the Arch VM… this is all totally native Bitcoin programmability.”

Unlike most L2s that use wrapped BTC on EVM chains, Arch settles directly on Bitcoin’s base layer.

Solana-Inspired Tech, Bitcoin-Aligned Mission

“We forked the exact same repo that the SVM was created from… a very high-performing and fast blockchain with sub-second blocks.”

Arch adapts Solana-style performance to Bitcoin’s UTXO model using a purpose-built Arch VM.

Scaling Bitcoin Means Securing Its Future

“We need to make sure that there are enough incentives and fees that are going to those miners via base layer activity.”

Arch’s approach helps preserve miners incentives as block rewards decline – critical for long-term decentralization.

Native Bitcoin UX, No Bridges or ERC-20s

“You’re not bridging anywhere… you’re signing Bitcoin transactions.”

This model removes the friction of bridging and wrapped tokens, making it more appealing to conservative Bitcoiners.

Institutional Bitcoin Holdings Will Spark Infrastructure Demand

“The more and more people that I talk to… they’re all stuck in this mindset that Bitcoin is just this reserve asset.”

Mudano argues that Bitcoin DeFi must evolve if institutions are to treat BTC as both a treasury asset and a productive tool.

Bitcoin Is the Only Crypto Most People Trust

“Every person is going to name Bitcoin. When people think of crypto, they think of Bitcoin.”

That trust makes Bitcoin the ideal base asset for onboarding mainstream users into crypto finance.

Lightning Wasn’t Enough – Arch Aims for Fintech Integration

“We’re working directly with fintech providers so that we can be at the point of sale using some form of Bitcoin.”

Instead of payments via Lightning, Arch sees a path through financial apps and infrastructure layers.

Bridging Incentives with Miner Economics

“Every time you’re signing a smart contract on Bitcoin, we’re driving demand for block space on Bitcoin because we’re paying Bitcoin fees.”

This ensures that smart contract activity directly benefits the Bitcoin network and its miners.

Ethereum Is Losing Value to Layer-2s – Bitcoin Can Avoid That

“There’s far too much value leakage down to the Layer-2s in this old modularity approach.”

Arch wants to keep value on the Bitcoin base layer, reinforcing its long-term health rather than siphoning it off.

Programmability Turns BTC into Infrastructure

“Without programmability, Bitcoin is just passive capital. Programmability is what turns money into economic infrastructure.”

The Arch vision is clear: Bitcoin can be more than a store of value – it can be the foundation of a permissionless economy.

Real-World Bitcoin Use Cases Are Emerging

“There’s a company called Meanwhile that’s doing Bitcoin-denominated life insurance policies… another called People’s Reserve is doing a hybrid Bitcoin-backed mortgage.”

From mortgages to factoring, businesses are already building Bitcoin-native services for real-world problems.

Arch Raised $13M to Scale Native Bitcoin DeFi

“What this funding will ultimately be utilized for is to… scale the infrastructure and close the gap on the developer experience.”

With support from Pantera and Multicoin, Arch is pushing forward to make Bitcoin DeFi a reality for users and developers alike.