Why Institutions May Pivot From Passive BTC Exposure to BTCFi

Digital Asset Treasuries (DATs), which gained prominence by passively holding Bitcoin, are facing pressure as valuations normalize and investors demand operational performance beyond mere BTC appreciation. Industry leaders like Matt Luongo of Mezo note that DATs now need to earn yield, but they are constrained from using ecosystems like Ethereum due to narrative consistency with shareholders. Consequently, institutions are looking toward Bitcoin-native finance (BTCFi) for productive deployment of their BTC reserves. Nathan McCauley of Anchorage Digital confirms that clients increasingly want their Bitcoin to earn rewards, unlock liquidity, or serve as collateral securely and compliantly. The growth of BTCFi, evidenced by rising Total Value Locked, reflects this interest. Early adopters include hedge funds, asset managers, and crypto-native funds demanding predictable economics and clear collateral mechanics. A significant acceleration in BTCFi adoption is anticipated within the next 12–24 months, contingent upon regulatory clarity, custody integration, and risk frameworks aligning with institutional standards, potentially shifting tens of billions from passive holding to productive use. A new partnership between Anchorage Digital and Mezo is already providing a pathway for institutions to borrow against BTC via Mezo’s MUSD stablecoin.

(Source：CoinDesk)