Bitcoin has historically been terrible as a yield asset. Fortunately, the options for earning interest are beginning to abound.
Bitcoin (BTC) has been a terrific store of value but a terrible yield asset. Fortunately, the days of sub-0.5% BTC yields are ending. Emerging opportunities in Bitcoin’s layer-2 (L2) and decentralized finance (DeFi) ecosystems are game changers. Here’s how to prepare for the coming BTC yield boom.
Bitcoin mining used to be the only way to earn meaningful BTC rewards. Regular holders had to settle for sketchy centralized finance (CeFi) platforms — such as now-defunct Celsius and Voyager — or pitiful DeFi yields. As of Sept. 5, DeFi lending platform Aave was paying Wrapped Bitcoin (WBTC) depositors a measly 0.04% APR.
That’s changing. After years of quiet development, Bitcoin’s L2 scaling networks — such as Lightning Network, Core Chain, Rootstock (RSK), and Stacks — are gaining traction. Total value locked (TVL) on Bitcoin’s L2s surged to approximately $1.4 billion as of Sept. 5, according to data from DeFiLlama. That’s up nearly 275% year-to-date and tenfold since 2023.
