Institutional attitudes toward bitcoin performance are beginning to change and there is now renewed interest in BTC rewards after years of skepticism driven by the risk of smart contracts, leverage and opaque strategies, GlobalStake co-founder Thomas Chaffee told CoinDesk on Thursday.
Products that allow users to earn a return on their bitcoin holdings often require including BTC in protocols, which involves smart contract risks or strategies that don’t scale, so institutions didn’t see “a risk-return profile that made sense,” according to Chaffee.
That reluctance is starting to change, Chaffee said, not because institutions suddenly want more risk, but because the types of strategies available to them have evolved. Instead of protocol-based returns or token incentives, allocators are increasingly gravitating toward fully collateralized, market-neutral approaches that resemble traditional financial strategies already familiar to hedge funds and treasuries, he said.
“The behavioral change we’re seeing is not that institutions are looking for performance,” Chaffee said. “Institutions finally get on board once the strategies, controls and infrastructure look like something they can actually deploy capital on at scale.”
The renewed interest comes after years of failed or short-lived attempts to generate yield in bitcoin, many of which unraveled during the 2022 market downturn when prominent lenders froze withdrawals and ultimately collapsed amid liquidity stress, most notably when crypto lending service Celsius Network indefinitely paused withdrawals and transfers citing “extreme market conditions” in mid-2022 and later filed for bankruptcy.
Chaffee isn’t the only one seeing renewed institutional interest in bitcoin’s performance. “People who own bitcoin, whether on the balance sheet or as investors, increasingly see it as a boat sitting there,” Richard Green, director at Rootstock Institutional, recently told CoinDesk. “You can’t just sit there doing nothing; you need to increase performance.” Green said professional investors now want their digital assets to “work as hard as possible” within their risk mandates.
Chaffee explained that GlobalStake, which provides staking infrastructure through proof-of-stake networks, began repeatedly hearing the same question from customers over the past few years: whether similar institutional-grade yield opportunities existed for bitcoin.
GlobalStake on Thursday unveiled its Bitcoin Yield Gateway, a platform designed to aggregate multiple third-party bitcoin yield strategies behind a single onboarding, compliance and integration layer.
The co-founder explained that the company expects approximately $500 million worth of bitcoins to be allocated within three months. “We expect bitcoin to be allocated during the gateway’s first quarter implementation period, originating from a Canada-based custody partner, demand generated by the parties through our partner MG Stover and our clients, which include family offices, digital asset treasuries (DATs), corporate treasuries and hedge funds.”
Other companies are tackling the problem from the infrastructure layer. Babylon Labs, for example, is developing systems that allow native bitcoin to be used as non-custodial collateral in financial applications, an effort aimed at expanding the utility of BTC rather than generating yield directly.
