Institutions are rushing into Bitcoin this cycle. Driven by regulatory clarity, macroeconomic shifts, and mainstream investment products like spot ETFs, Bitcoin has captured both the interest and capital of institutions, boosting its legitimacy and integrating it more deeply into the traditional financial (TradFi) system.
JPMorgan found that institutions hold about 25% of Bitcoin exchange-traded products. Bitcoin ETFs, in particular, currently hold almost $160 billion in assets. Meanwhile, another survey has found that 85% of companies have already allocated to digital assets or plan to do so this year.
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With this level of institutional commitment and Bitcoin now at a $2 trillion market cap, the focus is shifting beyond simple accumulation. Institutions increasingly want to generate yield on their BTC holdings.
“Institutions want a way to access sustainable yields on Bitcoin,” noted Hong Sun , Head of Institutional at Core DAO , “but without compromising their custody setups or operational workflows.”
Why Institutions Want Bitcoin Yield
Asset managers with billions on the books need yield, especially now that central banks are cutting rates. Bitcoin yield offers a way to compensate for declining returns elsewhere.
Bitcoin, in itself, doesn’t produce any yield, though. After all, the decentralized cryptocurrency has no built-in cash flow and can only be purchased or mined.
This is unlike stocks and bonds, which may pay dividends or interest, but similar to gold, a traditional safe haven whose price has surpassed $4,050 to hit a fresh peak, up 285% in the last decade.
However, the ability to generate yield on Bitcoin would enable asset managers, corporations, and institutions to diversify their revenue streams and maximize their earnings while remaining exposed to the asset’s substantial price growth.
More importantly, allowing Bitcoin holders to earn income without selling their coins would set the digital gold apart from physical bullion, which generates no returns on its own.
Unlocking Bitcoin’s Productivity Through Innovation
The growing demand for a more productive Bitcoin has led to the development of innovative products such as lending, collateral strategies, staking, liquid staking tokens (LSTs), and restaking.
Among these, staking has proved to be a more attractive option. Though Bitcoin is a Proof-of-Work ( PoW ) coin, it can be staked on Proof-of-Stake (PoS) networks like Core to secure the blockchain in exchange for rewards. Core offers yield on Bitcoin without principal risk.
“Holders use Bitcoin’s native CLTV (check lock time verify) function to time lock Bitcoin to their own wallet and to the Bitcoin blockchain. Doing so earns them the right to participate in Core’s consensus, which then allows them to vote for validators that secure the Core blockchain and earn rewards, without ever moving their Bitcoin,” explained Sun.
Liquid staking tokens take this further by allowing institutions to access Bitcoin yield while maintaining full liquidity and retaining custody of their assets.
Core has introduced LstBTC, built specifically for institutional holders, active traders, and structured product providers using this approach.
Sun believes that in the coming years, products like LstBTC will become the most widely adopted collateral asset in crypto. They will be “a foundational pillar of institutional Bitcoin holders’ portfolios, which transforms how institutions think about Bitcoin allocations and liquidity management,” he added.
Institutional-Grade Infrastructure Makes it Work at Scale
Just offering attractive yields, however, isn’t enough. This income needs to be combined with custody, compliance, and risk management .
This is where crypto custody firms like BitGo come into the picture. With their strong compliance standards, security track record, and custody protocols, these platforms streamline everything.
Custodial solutions offer institutions the control and protection they expect. This allows crypto products to achieve faster onboarding cycles, higher TVL participation from institutional partners, and better client retention, as Core observed upon partnering with BitGo late last year to offer institutions yield.
By integrating with BitGo, Core’s solutions became “immediately accessible to a global network of institutional clients without introducing unnecessary friction,” which Sun noted is “a huge differentiator” in terms of both adoption and scale.
The combination of sustainable yield and institutional-grade infrastructure creates a powerful incentive for long-term holding and broader participation. As these yield-bearing opportunities gain traction, they position Bitcoin to evolve beyond a store of value into a productive financial instrument, potentially narrowing the gap with gold, which currently dominates as the global safe haven with a market cap exceeding $27 trillion.
