Interest from institutional investors in Bitcoin is evolving, moving beyond merely holding the asset as a store of value. Many asset managers and corporate treasuries are now looking to harness Bitcoin’s capabilities for yield generation through emerging platforms like Rootstock and Babylon, which are establishing connections between Bitcoin and yield-producing protocols.
Richard Green, director of Rootstock Institutional, highlighted this shift, noting that holders of Bitcoin—whether as part of a corporate balance sheet or as individual investors—are increasingly viewing their assets as idle. “They want it to be a utilized asset. It can’t just sit there doing nothing; it needs to be adding yield,” he stated. This perspective marks a significant departure from Bitcoin’s initial reputation as a financial hedge.
Now, professional investors expect their Bitcoin holdings to actively contribute to their portfolio performance, similar to the yield dynamics prevalent in other digital asset ecosystems like Ethereum and Solana. This evolution is supported by Bitcoin-native solutions that facilitate yield generation without stepping outside the Bitcoin network itself.
Rootstock has observed a growing interest in collateralized products and tokenized funds that offer yield in Bitcoin. Green emphasized the necessity of guiding institutions through the use of BTC-backed stablecoins and credit structures that allow miners, remittance services, and corporate treasuries to unlock liquidity while maintaining their Bitcoin assets.
The motivations for corporates are as practical as they are philosophical. For companies that hold Bitcoin, the reality is that they could be incurring costs in the range of 10-50 basis points on custody alone. “You’re wanting to nullify that,” Green pointed out. As options for Bitcoin yield become more reliable, these institutions are less inclined to resort to complex DeFi strategies.
Despite these developments, the yield opportunities for Bitcoin remain limited compared to those offered by Ethereum’s staking ecosystem. Andrew Gibb, CEO of Twinstake, noted that while they have evaluated numerous platforms claiming to offer Bitcoin staking or yield capabilities, institutional demand is developing gradually.
Twinstake contributes infrastructure to Babylon, which facilitates Bitcoin-based restaking for proof-of-stake networks. Gibb mentioned that while the technology is operational, generating significant interest remains challenging due to the modest returns on offer. “If you hold Bitcoin, do you really hold it because you want an extra 1% yield? That’s the psychological hurdle,” he explained.
Some platforms are attempting to address this by presenting yield generation as a non-lending solution, employing strategies like time-locking Bitcoin. This way, investors technically retain possession of their Bitcoin, albeit in a locked state. Gibb cautioned, however, that meaningful yield must accompany such strategies to justify the requirement to lock up assets.
Nonetheless, the trends indicate that institutional holders of Bitcoin are increasingly seeking more than passive appreciation. As secure, Bitcoin-native yield products continue to emerge, the largest digital asset is gradually transforming into a productive asset class without losing its fundamental principle of self-custody. “It’s about operating in a world where bitcoin yield is apparent,” Green concluded. “And receiving that yield back in BTC.”
