🏁 Bitcoin’s yield race

Bitcoin is savings technology. 

You could spend it, but it’s not always pragmatic. Trade it, maybe, if you’re feeling lucky.

Never let anyone tell you that holding bitcoin is not using Bitcoin.

Of course, buying and holding bitcoin isn’t the most active use case. But it’s extremely popular.

Sid Powell, CEO and co-founder of onchain asset manager Maple Finance, is working at the epicenter of bitcoin yield. 

On today’s Supply Shock podcast, Powell unpacks how Maple thinks about bitcoin exposure, vs. the digital asset treasury companies that have proliferated this cycle.

“I think the core difference, if you boil it down, is most of these companies as yet are not actually generating a yield on the underlying asset, which is their bitcoin stockpile,” Powell told host Pete Rizzo.

“They are instead tranching out their capital structure to generate returns for their investors. And the ultimate return just comes from the appreciation of bitcoin or the volatility therein. Whereas for us, we've had to take it to a more fundamental level, which is we actually need to generate a return on the bitcoin.”

Powell outlined four ways to earn yield on bitcoin: lend it, which takes on counterparty risks. You could trade its volatility, monetizing its ups and downs while retaining the same overall number of coins. You could also sell covered calls — forfeiting the upside potential of bitcoin in exchange for more immediate yield by selling options.

Maple is offering the fourth alternative — staking it in partnership with Core DAO, which operates an EVM-compatible sidechain. “We are effectively validating the Core network, and to do this, we need bitcoin and CORE tokens, and we generate a yield, which we show our clients in bitcoin,” Powell said.

“The treasury companies are effectively monetizing the capital appreciation of bitcoin and using very sophisticated capital structure engineering, whereas we are trying to generate an underlying yield on that bitcoin.”

Catch the full episode on YouTube, Spotify, Apple Podcasts and X.

— David

Institutional interest in Ethereum is running hot. ETF flows are gaining momentum, new token acquisition vehicles are forming every week, and ecosystem morale is nearing ATHs. 

The only question left: Where will $ETH be when DAS London kicks off this October?

📅 October 13-15 | London

• BTC/USD enters its 20th day of (mostly) sideways price action. Current price: $118,350 — 3.7% below all-time high.

• Samourai Wallet founders have pleaded guilty to the second count of their indictment, conspiracy to operate an unlicensed money transmitter business.

• A US government strategic bitcoin reserve was absent from the White House’s digital assets report, but Bo Hines says Trump is still on it.