Authored by: Armando Aguilar, Leading Capital Strategy at TeraHash
For years, Bitcoin was largely seen as a dormant asset – a secure, decentralized store of value, economically inactive despite its predictable creation rate. However, this perception is changing, with over $7 billion worth of Bitcoin (BTC) now actively generating returns through established blockchain-based protocols.
In contrast to gold, which has a market capitalization of approximately $23 trillion and primarily sits unused, Bitcoin is now capable of generating yield on-chain, all while holders retain control of their assets. As new avenues for earning returns emerge, Bitcoin is undergoing a fundamental transformation, evolving from a purely passive asset to a productively scarce resource.
This shift is subtly influencing how capital risk is assessed, how institutions manage their reserves, and how portfolio strategies account for security. While scarcity may contribute to price stability, the ability to generate yield explains why miners, corporations, and investment funds are now allocating resources to Bitcoin rather than simply developing solutions around it.
A store of value that also generates income is no longer simply digital gold – it represents productive capital.
Productivity Over Scarcity
Bitcoin’s core economic principles remain unchanged: its supply is limited to 21 million, its issuance is transparently scheduled, and no single entity can manipulate or control it. Scarcity, verifiable transactions, and resistance to interference have always distinguished Bitcoin, but from 2025 onward, these distinct features have started to take on an extra meaning.
While the rate of Bitcoin creation is fixed, innovative protocol layers are emerging that enable BTC to generate returns on-chain. Bitcoin is gaining prominence because of its potential applications. These new tools let holders earn yields without relinquishing control, relying on centralized intermediaries, or altering the original protocol. These advancements uphold Bitcoin’s fundamental architecture but reshape how capital interacts with the asset.
This effect is already visible. El Salvador continues to add BTC to its national treasury, and a 2025 US executive order recognized Bitcoin as a key reserve asset for critical systems. Moreover, spot exchange-traded funds (ETFs) now hold over 1.26 million BTC – exceeding 6% of the total supply.
Explore More: A Comparison: US Bitcoin, Gold, and Oil Reserves
On the mining front, public miners are increasingly holding onto their Bitcoin. Instead, a growing portion is being allocated toward staking and synthetic yield strategies to improve long-term returns.
Clearly, the original value proposition has developed subtly in design but extensively in effect. The characteristics that once made Bitcoin trustworthy now make it powerful: a formerly passive asset is transitioning into a yield-generating asset. This trend establishes a foundation for a native yield curve associated with Bitcoin itself, and other Bitcoin-related assets.
Retain Control and Earn with Bitcoin
Until recently, earning a return on crypto seemed inaccessible. In the case of Bitcoin, generating yield non-custodially was challenging, particularly without compromising its foundational neutrality. This perspective has since evolved. Nowadays, innovative protocol layers empower holders to utilize their BTC in ways once restricted to centralized platforms.
Certain platforms enable long-term holders to stake BTC to reinforce network security and earn yields, without needing to wrap the asset or bridge it across different blockchains. Conversely, other platforms enable users to leverage their Bitcoin within decentralized finance (DeFi) applications, earning fees from swaps and lending transactions while retaining ownership. Importantly, none of these systems demand the transfer of private keys to a third party, nor do they rely on dubious yield methods that have caused prior problems.
These strategies are no longer experimental. Strategies tailored toward miners are attracting organizations aiming to enhance treasury efficiency without moving away from the Bitcoin network. As such, a Bitcoin-native yield curve anchored in transparency is starting to emerge.
As Bitcoin yield becomes self-custodied and accessible, a new challenge emerges: how to accurately measure it. Although protocols are becoming more available, clear standards are lacking. Without a benchmark for evaluating the returns generated by productive BTC, investors, treasuries, and miners must make decisions without clear information.
Benchmarking Bitcoin Yield
Now that Bitcoin can generate a return, a clear and straightforward method for measuring this return is needed.
Currently, no universal standard exists. While some investors perceive BTC as hedge capital, others are deploying it to generate yields. However, the benchmarks for measuring Bitcoin are inconsistent, given the lack of comparable assets. For instance, a treasury team locking coins for a week lacks a simple approach for explaining the associated risk, and a miner using rewards in a yield strategy might still consider it treasury diversification.
Consider a medium-sized DAO with 1,200 BTC and a six-month payroll buffer. The DAO allocates half of its holdings into a 30-day vault on a Bitcoin-secured protocol and earns yield. However, without a baseline, the team is unable to determine whether this is a cautious or a risky move. Depending on the analysis, the same decision could be considered clever treasury management or reckless yield-chasing.
Bitcoin needs a benchmark—not a “risk-free rate” like in bond markets, but a repeatable, self-custodied, on-chain yield benchmark generated natively on Bitcoin, net of fees, and grouped by term lengths such as seven days, 30 days, and 90 days. This structure provides a reference point, turning yield from speculation into a measurable benchmark.
With such a benchmark, treasury policies, disclosures, and strategies can be constructed effectively, while returns above the baseline can be priced according to their true value, accounting for potential risk.
This is where the analogy with gold breaks down. Gold provides no returns, but productive Bitcoin does. As long as treasuries treat BTC as a mere storage item without a return, it becomes easier to distinguish between active capital management and simple asset storage.
Authored by: Armando Aguilar, Leading Capital Strategy at TeraHash.
This content is intended for general awareness only and should not be considered as legal or investment guidance. All expressed perspectives are those of the author and do not necessarily represent the views of Cointelegraph.