Institutional interest in bitcoin is moving beyond passive exposure as infrastructure for yield generation and decentralized finance (DEFI)-style activity.
With new platforms like Rootstock and Babylon Building Bridges between Bitcoin and yield-bearing protocols, some asset managers and corporate treasuries are beginning to view the asset as something more than digital gold.
“People who hold bitcoin – Whether on the balance sheet or as investors – it’s increasingly seen as a pot just sitting there,” said Richard Green, director of Rootstock Institutional, a New team set up by Bitcoin Sidechain project to focus on the institutional market. “They still want it to be a used property. It can’t sit there idle; it has to add yield.”
That mindset marks a notable evolution from Bitcoin’s early institutional narrative of value preservation. Green said in an interview with Coindesk that professional investors expect their holdings to “work as hard as possible” within their risk mandates, reflecting the expected yields that have long driven adoption in other digital asset ecosystems such as Ethereum or Solana.
The shift is facilitated by Bitcoin-native solutions that allow yield generation without leaving the network. Rootstock, that is Bitcoin’s Hash Power secures smart contracts.
“Our role is to guide institutions through this,” Green said. “We see demand for BTC supported by StableCoins and credit structures that allow miners, remittance firms, and wealth to unlock liquidity while remaining in Bitcoin.”
For many corporations, the case is as practical as it is philosophical. “If you’re a Treasury company and you’re keeping Bitcoin, you’re losing 10-50 basis points on that cost,” Green said. “You want to eliminate that. Now the options are safe and secure so you don’t have to go to some crazy defi looping techniques.”
Such Bitcoin-denominated yield opportunities—sometimes offering 1-2% annual returns—are increasingly viewed as acceptable by conservative investors seeking to offset the drag of caution without taking exposure to wrapped or bridged assets.
Bitcoin breaks and the yield problem
However, the yield remains thin compared to Ethereum’s stake economy. “We reviewed 19 different protocols or tech platforms that announced Bitcoin staking or yield,” said Andrew Gibb, CEO of Twinstake, a staking infrastructure provider. “The tech is there, but the institutional demand takes time to come through.”
Twinstake runs the infrastructure for Babylon, A project that enables Bitcoin-based recovery for proof-of-stake networks. While the technical works, Gibb said the often insignificant returns make for a tough sell. “If you’re holding Bitcoin, are you really holding it because you want an extra 1% yield? That’s the psychological hurdle,” he told Coindesk in an interview.
Some services seek to overcome that by framing yield generation as non-lending, using mechanisms such as bitcoin time-locking for yield without rehypothecation.
“You still have it—it’s just locked,” Gibb said. “That’s how some projects sell it, but then the yield has to be significant to justify that lock.”
Although adoption is gradual, it seems that institutional bitcoin holders are no longer content with passive appreciation alone. As safe, bitcoin-yielding products proliferate, the world’s largest digital asset enters productivity-without compromising the basic principle of self-custody.
“It’s about operating in a world where the yield of bitcoin is apparent,” Green said. “And receiving that yield back in BTC.”
