RootstockLabs launched Rootstock Institutional, aiming to deploy $260 billion in institutional Bitcoin into DeFi.
Summary
- RootstockLabs launched Rootstock Institutional to explore institutional Bitcoin uses
- Major institutions currently own $260B in BTC that remains idle
- Institutions could deploy this idle BTC in DeFi, earning yield for investors
Over 2.6 million Bitcoin (BTC) held by institutions remains idle, but this could soon change. On Tuesday, October 14, RootstockLabs, a key contributor to Rootstock, the first Bitcoin layer-2, announced the launch of Rootstock Institutional.
The new team will focus on ways that institutions can tap into BTC’s DeFi potential. Namely, institutions could use Rootstock, a DeFi layer for Bitcoin, to obtain yield on their BTC. Specifically, institutions can use BTC for lending and borrowing, together with other on-chain yield strategies.
“The market has evolved beyond simple Bitcoin holding. Institutions managing significant Bitcoin treasuries are seeking sustainable, transparent on-chain frameworks without compromising their long-term position,” said Richard Green, Managing Director of Rootstock Institutional and Ecosystem at RootstockLabs.
99% of institutional Bitcoin generates negative returns
According to RootstockLabs’ Institutional BTCFi Report, institutions hold 2.6 million BTC in ETFs, corporate treasuries, and mining reserves. However, 99% of this BTC generates negative returns, as firms have to pay custody fees, which range from 0.1% to 0.5% annually.
Despite this, these reserves present a significant financial opportunity for holders. By March 2025, Bitcoin-native DeFi grew 2,700% year over year to $8.6 billion in total value locked. However, this figure still amounts to just 0.79% of the BTC supply, compared to 50% for Ethereum.
“Bitcoin’s evolution from pure store of value to productive financial asset represents one of the most significant opportunities in digital finance,” said Richard Green. “We’re already seeing this firsthand, family offices, web3 funds, exchanges, and bitcoin-first firms are actively working with us to deploy their Bitcoin on Rootstock.”
