RootstockLabs says in a new report that lending, yield generation and balance-sheet financing could bring more institutional demand for Bitcoin. It estimates that 1.5% of Bitcoin’s supply is used in lending and Bitcoin-native finance, while identifiable institutional investors hold about 3.9 million BTC.
The report models a hypothetical case in which institutional holdings double to 7.8 million BTC. If 5% of those holdings earned a 5% annual yield, they would produce 19,500 BTC a year in returns on existing holdings—not a forecast of new demand. Report author Tony DiCarlo said financialization carries risks, including borrower defaults, custody failures, leverage and Bitcoin’s volatility. He also warned that institutional adoption could concentrate coins with a few custodians; ETF shareholders own shares, not coins.
