Macro analyst Luke Gromen asserts that Bitcoin’s lack of native yield is not a drawback; rather, it contributes to its status as a more secure store of value.
“Earning a yield involves taking on risk,” Gromen explained to Natalie Brunell on the Coin Stories podcast on Wednesday, in response to views from critics who favor yield-generating assets over Bitcoin (BTC).
“Anyone expressing that opinion is displaying their Western financial privilege,” he noted.
Gromen cited the downfall of crypto exchange FTX in November 2022 as a pertinent example. “When you were staking on FTX, you were earning a yield, how did that work out?” he remarked.
“Your bank account earns a deposit yield because, in a capitalist system, you are assuming risk,” he stated. “Everyone believes that money in the bank truly belongs to them. In reality, it belongs to the banks,” he added.
Ether’s proof-of-stake model is appealing
These remarks come as Bitcoin and Ether (ETH) are frequently compared, with Ether enthusiasts claiming that Ethereum’s proof-of-stake model—which allows users to earn staking rewards—makes it a more appealing choice for traditional investors compared to Bitcoin.
Just as banks offer interest to attract deposits and enhance their lending capacity, Ether holders earn rewards for staking their ETH, aiding in the activation and security of network validators.
Nassar Achkar, chief strategy officer at the CoinW crypto exchange, recently noted that institutional clients are increasingly directing treasury assets towards ETH because of its staking yield potential and role in tokenization ecosystems. Companies with publicly-listed treasury holdings now possess approximately 4.13% of the total ETH supply, valued at roughly $23.01 billion at the time of writing, according to StrategicETHReserve.
A case for Bitcoin
While Bitcoin is not acquired for yield, it offers numerous perceived advantages for investors. It is viewed as a hedge against inflation, governmental control, and economic uncertainty, often being labeled as a store of value or “digital gold.”
Public Bitcoin treasuries currently hold around $119.65 billion, according to BitcoinTreasuries.NET.
Related: Bitcoin price hits $117K as traders prepare for Fed interest rate cuts
Although Bitcoin lacks native staking capabilities, holders can still obtain yield through centralized lending platforms, Wrapped Bitcoin (WBTC) on Ethereum, and Bitcoin-related networks like Babylon and Stacks.
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