Bitcoin Yield Strategies Gain Traction Among Long-Term Holders
1min read In the latest edition of Crypto for Advisors, Todd Bendell from Amphibian Capital discusses the strategy of using bitcoin yield products to grow bitcoin holdings beyond price appreciation. Bendell emphasizes that bitcoin was never meant to be idle and that long-term holders are now seeking ways to put their bitcoin to work within the Bitcoin ecosystem. This involves exploring BTC-on-BTC yield strategies, which are institutional-grade and aim to generate returns in bitcoin, not just on bitcoin. These strategies include delta-neutral basis trades, statistical arbitrage, DeFi yield farming, and machine learning-driven quant execution, all settled in bitcoin. The objective is to accumulate more bitcoin over time without relying solely on price appreciation. By allocating across a diversified mix of strategies and managers, investors can pursue consistent BTC growth while mitigating risks.
Bendell also addresses the myth that holding bitcoin in cold storage is the safest option. While cold storage has its benefits, it also comes with risks such as human error, hardware failure, and loss of keys. Professional custodians, who are regulated, insured, and audited, are now standard infrastructure providers in digital asset management. For allocators managing material BTC positions, yield-generating custody is an upgrade rather than a tradeoff. Several forces are converging to make BTC-on-BTC yield timely, including the return of volatility, stronger infrastructure, and real institutional interest. ETFs have opened the floodgates for capital, but most of it is still under-allocated and under-deployed. Bitcoin is growing up, and the strategies around it need to grow with it. BTC-on-BTC yield and long-term holding are not mutually exclusive. Allocators can continue to hold core BTC positions while using active strategies to pursue steady accumulation. With proper risk controls, BTC-native yield offers a pragmatic path to accumulate more bitcoin without abandoning its core principles. For allocators thinking in decades, BTC-on-BTC yield opens the door to a more productive bitcoin strategy that matches conviction with action.
In the Ask an Expert section, Rich Rines, an initial contributor to Core DAO, provides guidance to Bitcoin developers. Rines emphasizes the importance of aligning early developer incentives with long-term protocol value. This involves rewarding real product-market fit and real users, not short-term speculation. Building tight relationships and solving problems for real communities is key. Rines also advises developers to focus on real usage and demand instead of short-term token price action. Bitcoin's design philosophy, which emphasizes simplicity with real utility, is still underutilized. Building around Bitcoin and extending its utility without compromising its foundation remains one of the most underrated opportunities in the space today.
Ask Aime: How can retail investors benefit from bitcoin yield products?
