CONNECT WITH US
Web3 & Blockchain

Web3 & Blockchain

Bitcoin lending and yield could drive next wave of institutional demand, Rootstock says

Cointelegraph logo

Published on

Add as a preferred source on Google
Bitcoin lending and yield could drive next wave of institutional demand, Rootstock says

A new report argues that putting institutional Bitcoin holdings to work through lending, collateral and financing could create demand beyond its store-of-value role.

A new report from Bitcoin infrastructure developer RootstockLabs argues that Bitcoin’s next wave of institutional demand could come from lending, yield generation and balance-sheet financing, expanding its role beyond a store of value.

RootstockLabs estimates that just 1.5% of Bitcoin’s (BTC) supply currently participates in lending and Bitcoin-native finance, while identifiable institutional investors hold roughly 3.9 million BTC. Putting more of those holdings to work could create additional demand for the asset without changing its fixed supply.

The analysis identifies two emerging sources of financial utility: generating returns from existing Bitcoin holdings through lending and structured credit, and using Bitcoin alongside fiat-denominated liabilities to improve corporate balance-sheet efficiency. RootstockLabs argues that both could encourage institutions to acquire and retain more BTC.

The report outlines a hypothetical scenario in which institutional Bitcoin holdings double to 7.8 million BTC. If 5% of those holdings earned a 5% annual yield, institutions would collectively generate 19,500 BTC a year. The figure represents potential returns on existing holdings, not a forecast of new Bitcoin demand.

Drawing a comparison to gold, the report argues that successful monetary assets develop additional sources of demand beyond their original role as stores of value. While gold found uses in jewelry and electronics, RootstockLabs sees Bitcoin’s next source of utility emerging through financial markets.

Related: Bitcoin ETF inflows climb to $176M as BTC rebounds above $80K

Asked about the risks associated with Bitcoin’s growing financialization, Tony DiCarlo, director of institutional propositions at RootstockLabs and author of the report, acknowledged the concerns but argued that Bitcoin’s underlying design offers important advantages.


Source link
Related Topics:Web3 & Blockchain

Disclaimer

We strive to uphold the highest ethical standards in all of our reporting and coverage. We TheMorningPulse.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It's possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.