The world is in search of yield. As central banks continue to print more and more fiat currency, people are being forced to look to alternative assets in the name of wealth preservation and growth. Nowhere is this more true than in the cryptocurrency space, where DeFi projects built on top of Ethereum have exploded in popularity since the summer. Finally, however, we are starting to see these assets come to the OG of digital value: Bitcoin. The , or BTCST, is one of the most appealing examples being brought to market, whose returns are both tied to and in Bitcoin. BTCST was created to solve one of the main pain points for Bitcoin miners but is also appealing to investors looking for exposure to BTC mining. For BTC Miners, a significant impediment to participation is the limited number of exit options. BTCST solves this problem by bringing exchange-grade liquidity to Bitcoin mining. Each BTCST is collateralized by 0.1 terahash per second (“TH/s”) of Bitcoin mining power. For investors looking to increase their exposure to Bitcoin, BTCST is interesting both from a holding and staking perspective. The BTCST asset will perform as a leveraged Bitcoin token free from liquidation risk. This is because the market price is determinable as the discounted cash flow of the underlying mining power. In addition, holders of BTCST who stake the token through the project’s Dapp receive real BTC directly as a reward. At the time of this writing, those yields were in excess of 60% APY.

DeFi on top of Bitcoin is more attractive to investors because of the ability to reward stakers in BTC itself. This is notably different from most more popular protocols that reward stakers with more of the same. The fact that BTCST functions as a leveraged BTC token, on top of the BTC rewards hodlers can earn from staking the token, makes it an interesting asset to consider given the unprecedented BTC bull market we are witnessing today. In addition to the above, the project has been busy getting some of the largest BTC miners and mining pools on board to commit hashpower to be underwritten for the token. In addition to being backed by hashrate from Ke Wo Ying Mining and 360power mining farms, they recently announced 5 miners, representing about 12% of the entire BTC global hashrate, have started to work with BTCST as tokenization miners. We expect the derivatives markets, and DeFi in general on top of Bitcoin to continue to grow because of the need for liquidity and hedging from Bitcoin Miners themselves. This coupled with an unprecedented bull market and search for yield from more general crypto investors means we’ll be watching BTCST closely going forward.  

Image by from