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Opinion by: Armando Aguilar, head of capital formation and growth at TeraHash
For years, Bitcoin was seen merely as an inert asset: a decentralized vault generating no economic activity despite its fixed supply. However, over $7 billion worth of Bitcoin (BTC) is now generating native, on-chain yield through significant protocols — signaling a shift.
While gold’s market cap hovers around $23 trillion, largely idle, Bitcoin is actively earning on-chain, allowing holders to maintain custody. With new layers creating returns, Bitcoin is transitioning into a realm of productive scarcity.
This transformation is subtly redefining risk pricing in capital, influencing how institutions manage reserves, and altering portfolio theory regarding safety. While scarcity may account for price stability, productivity is driving miners, treasuries, and funds to allocate assets to BTC instead of merely building around it.
An asset that generates yield is no longer just digital gold — it’s evolving into productive capital.
While Scarcity Matters, Productivity Prevails
Bitcoin’s fundamental characteristics remain unchanged: its supply is capped at 21 million, its issuance schedule is transparent, and no centralized authority can inflate or manipulate it. Scarcity, auditability, and resistance to censorship have always set Bitcoin apart. By 2025, these distinctive traits began to carry deeper significance.
With the issuance rate fixed and new protocol layers enabling BTC to produce on-chain returns, Bitcoin is gaining traction for its potential. Innovative tools now empower holders to earn real yield without relinquishing custody, avoiding reliance on centralized platforms or altering the underlying protocol. This preserves Bitcoin’s core mechanics while transforming capital engagement with the asset.
The effects are already observable. Bitcoin is the only cryptocurrency officially held in sovereign reserves: El Salvador continues to allocate BTC in its national treasury, and a 2025 US executive order recognized Bitcoin as a strategic reserve asset for critical infrastructure. Additionally, spot exchange-traded funds (ETFs) now hold over 1.26 million BTC — more than 6% of the total supply.
Related: US Bitcoin reserve vs. gold and oil reserves: How do they compare?
On the mining front, public miners are no longer in a rush to sell their BTC. A growing percentage is now allocating BTC into staking and synthetic yield strategies to enhance long-term returns.
The original value proposition is evolving, subtly in design but profoundly in impact. What once made Bitcoin trustworthy is also enhancing its power — a formerly passive asset is becoming a yield-generating one. This sets the stage for a forthcoming native yield curve centered around Bitcoin, along with Bitcoin-linked assets.
Bitcoin Generates Yield Without Surrendering Control
The notion of earning returns on crypto was previously deemed unattainable. In Bitcoin’s case, finding non-custodial yield without compromising its fundamental neutrality was challenging. This assumption is now outdated. Today, new protocol layers allow holders to leverage BTC in ways that were once only available on centralized platforms.
Some platforms now enable long-term holders to stake native BTC, securing the network while earning yield without wrapping the asset or transferring it across chains. Others facilitate users in leveraging their Bitcoin within decentralized finance applications, earning fees from swaps and lending without sacrificing ownership. Importantly, none of these frameworks require handing over keys to a third party or rely on the opaque yield tactics that previously caused issues.
This shift is clearly moving beyond pilot projects. Miner-aligned strategies are gaining traction among firms seeking to enhance treasury efficiency while remaining within the Bitcoin ecosystem. Consequently, a transparent yield curve native to Bitcoin is beginning to form.
Once Bitcoin yield becomes accessible and self-custodied, a new challenge arises: How do you quantify it? As protocols become more available and accessible, clarity is required. Without a standard for measuring productive BTC returns, investors, treasuries, and miners face uncertainty in their decision-making.
Establishing a Benchmark for Bitcoin Yield
If Bitcoin can yield returns, the logical next step is creating a simple way to measure them.
Currently, no standard exists. Some investors view BTC as hedge capital; others generate yield from it. However, discrepancies persist regarding what the benchmarks for measuring Bitcoin should be, as there are no directly comparable assets. For instance, a treasury team might lock coins for a week but struggle to communicate the associated risks, or a miner may funnel rewards into a yield strategy but continue to treat it as treasury diversification.
Consider a mid-sized decentralized autonomous organization holding 1,200 BTC and facing six months of payroll. If it allocates half into a 30-day vault on a Bitcoin-secured protocol and earns yield, the team cannot determine if this is a cautious or risky choice without a baseline. This action could be praised as clever treasury management or criticized as reckless yield-chasing, depending on the analysis.
Bitcoin requires a benchmark. Not a “risk-free rate” like in the bond market, but a baseline: consistent, self-custodied on-chain yield generated natively on Bitcoin, net of fees, categorized by term lengths — seven days, 30, 90. This provides enough structure to convert yield from speculation into a referenceable benchmark.
With such a benchmark in place, treasury policies, disclosures, and strategies can be formulated around it, allowing for pricing of all returns above that baseline as risk worth pursuing — or not.
This is where the analogy with gold falters. Gold does not generate returns — productive Bitcoin does. The longer treasuries regard BTC merely as a vault asset without yields, the clearer it becomes who is effectively managing capital and who is just storing it.
Opinion by: Armando Aguilar, head of capital formation and growth at TeraHash.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
