On Oct. 19, the first Bitcoin (BTC), exchange-traded fund was made live on the New York Stock Exchange. This brought the crypto asset to the forefront of mainstream media and alternative media.
Although the ETF will not hold actual Bitcoin, it is a futures-based instrument. However, pundits and investors across the ecosystem have generally hailed its launch to be proof that Bitcoin has reached the big leagues. They also believe that it will soon surpass the $100,000 price target.
While many investors don’t have access to the EFT or won’t choose to, holders still have options to make a profit on their BTC holdings.
We’ll be looking at strategies BTC holders can use in order to get a yield.
BadgerDAO: DeFi and BTC
BadgerDAO, an open-source protocol built upon the Ethereum network, has the goal of creating products and the infrastructure required to facilitate the integration of Bitcoin into Decentralized Finance (DeFi).
BadgerDAO currently has the largest number of BTC-paired pools from which investors can obtain liquidity.
BadgerDAO Bitcoin yield offers Source: BadgerDAO
The BadgerDAO dashboard shows that there are many options available. There is the simple staking Wrapped BTC (wBTC) which can yield a yield of 1.22% to 27.98%, depending on the terms. There is also the option to staking in more complicated liquidity provider (LP), strategies such as the renBTC/wBTC/sBTC Pool, which can yield a yield of 7.07% up to 45.37%.
Wrapping BTC and RenVM can pose risks. A user must give up control of their original BTC to receive wBTC/renBTC. This violates the crypto code “not your keys not your crypto”
Holders of LP tokens that combine BTC with other cryptocurrencies like Ether (ETH), BADGER, or stablecoins such as Tether (USDT), and USD Coin (USDC) must consider the possibility for an impermanent loss if Bitcoin’s price rises significantly compared to the token it is paired.
According to data from Defi Lama, Trader Joe has $2.18 billion in assets and is the largest decentralized trading platform on Avalanche’s network.
Trader Joe has Bitcoin-related pools. Source: Trader Joe
Using wBTC over the Avalanche Network requires another layer that produces wBTC.e. This can then be traded or used for liquidity.
At the time this article was written, Trader Joe offers a yield of three LP tokens. This includes a return of 26.223% on the wBTC.e/AVAX pairs, 16% on the wBTC.e/USDC.e pairs, and 11.9% on the wBTC.e/USDT.e pairs. All rewards will be paid in the native JOE token of the protocol.
According to data from Defi Llama Raydium is currently the highest-ranked DeFi protocol on Solana and boasts a TVL worth $1.77 billion.
If you wish to use your BTC on Solana, you have the option to pair it with USDC or USDT, Serum(SRM), and a wrap version of Solana called mSOL.
Raydium has pools that are related to Bitcoin. Raydium
All rewards are paid in RAY tokens, and yields range from 5.16% up to 14.27%.
PancakeSwap ranks No. TVL ranked PancakeSwap as the No. 1 protocol on Binance Smart Chain (BSC). Data from Defi Lama shows that $5.39 Billion worth of tokens are currently locked onto the protocol.
To use Bitcoin on the BSC you must wrap it to become BTCB. Then, you can transact on the network.
PancakeSwap has Bitcoin-related pools Source: PancakeSwap
PancakeSwap currently offers a 5.44% return on the BTCB/ETH pairing, a 15.82% for the BTCB/BUSD pairs (Binance’s stablecoin Binance USD), and 20.79% on the BTCB/BNB pairing. All rewards will be paid in the native CAKE token of the protocol.
Related: Valkyrie Bitcoin futures ETF launched on Nasdaq with shares dropping by 3% within the first hour
Futures of Bitcoin decentralized
DYdX, a decentralized perpetual trading platform for futures trading, made headlines in September when it distributed thousands of dollars of its native DYDX governance token as a gift to early adopters.
The dYdX protocol is similar to the ProShares Bitcoin Strategy ETF. Trades are not settled in Bitcoin, but in USD stablecoins. This means that BTC stakers might not be as interested in the protocol if they only want to increase their Bitcoin holdings.
Instead of trading a government-regulated product, which is only available in the traditional markets, dYdX provides the 24/7 decentralized trading environment that crypto enthusiasts have come to love.
You would like to learn more about investing and trading in the crypto markets?
Bitcoin futures ETF’s debut is marked by the highest ever first day ‘natural volume’ of $1BProShares Bitcoin linked ETF launches on NYSE. As BTC prices rise above $63KBitcoin-related altcoins surge after rumors about BTC ETFs spread.Bitcoin briefly flips Swiss Franc following rally to new ATHBitcoin Futures ETF reaches $1B AUM in a record setting two dayscom. You should do your research before making any investment or trading decision.