Institutions Shift from Passive Bitcoin Holdings to Active BTCFi Strategies
Digital Asset Treasuries Rethink Bitcoin Strategies
During the last bull cycle, digital asset treasuries (DATs) gained prominence by accumulating Bitcoin (BTC) faster than competitors, leveraging it as a value-generating strategy. However, as market valuations stabilize and net asset values (NAVs) tighten, the realization is dawning that passive BTC exposure may no longer suffice.
Matt Luongo, co-founder and CEO of Bitcoin finance platform Mezo, notes, "Most DATs lack a competitive edge in buying Bitcoin; individuals can do that themselves. Now, they need to focus on earning yield and deploying strategies unfamiliar to retail investors."
With market dynamics shifting, investors now demand operational performance and revenue generation, not merely BTC appreciation. Brian Mahoney, Mezo's co-founder, highlights a narrative constraint: "These companies want yields from ecosystems like Ethereum or Solana but can't pursue them without violating their Bitcoin-native treasury narrative."
Institutions Seek Productive Bitcoin Use
Anchorage Digital, a federally chartered crypto bank, observes a shift in institutional inquiries. CEO Nathan McCauley states, "Institutions want their Bitcoin to be productive, earning rewards, unlocking liquidity, or serving as collateral, through secure and compliant infrastructure."
Anchorage's Porto wallet allows clients to earn on-chain rewards or borrow against BTC holdings, facilitating productive Bitcoin deployment without moving into unregulated environments. The growth of BTCFi, increasing from $200 million to $9 billion in total value locked, indicates rising interest, albeit still a fraction of the total Bitcoin supply.
Emerging Patterns in Institutional Adoption
McCauley identifies three emerging institutional categories: hedge funds seeking directional yield, asset managers with significant BTC reserves, and crypto-native funds wanting BTCFi access without infrastructure development. These groups demand predictable economics, clear collateral mechanics, and explainable risks.
The Porto platform, offering BTC-backed borrowing at fixed rates on Mezo, aligns with these demands, with staking options to follow.
A Potential Inflection Point
The next 12–24 months could mark an acceleration in BTCFi participation, contingent on regulatory clarity, custody integration, and risk frameworks. McCauley envisions a shift of tens of billions in institutional BTC from passive holding to active deployment once these align.
Luongo notes a behind-the-scenes urgency driven by competitive pressures rather than price. "Big banks, once thought slow movers, are entering the space rapidly," he observes. Mahoney adds that fintech convergence, with traditional finance integrating tokenized rails, is another accelerant.
A new partnership between Anchorage Digital and Mezo offers institutions a pathway into BTCFi. Through Porto, institutions can borrow against BTC using Mezo's MUSD stablecoin, with fixed rates starting at 1%. This service is live today, with veBTC rewards rolling out soon.