Bitcoin's BTC/USD Function as a Passive Store of Value Is Rapidly Giving Way to a More Dynamic Role

Bitcoin's BTC/USD function as a passive store of value is rapidly giving way to a more dynamic role, according to Brendon Sedo, an initial contributor to Core Chain and head of its investment arm, Core Ventures.

The passive function of Bitcoin BTC/USD as a store of value is quickly giving way to a more dynamic role as a yield-generating financial asset, according to Brendon Sedo, an initial contributor to Core Chain and head of its investment arm, Core Ventures.

"Institutions won't settle for simple holding," Sedo told Benzinga. "They're built on generating yield. Exchange traded funds are just the first step."

Sedo highlighted that the true frontier lies in realizing how to make Bitcoin into a productive asset, one that generates income without impacting custodians or the fabric of decentralization.

Central to this transformation is Core's Timelock Plus mechanism, which enables BTC holders to earn roughly 4-6% yield natively, without wrapping their coins or placing them in any derivative contracts.

"This eliminates the trust assumptions of custodians, bridges or other parties. It transforms Bitcoin from a ‘hodl-only' asset into an income-generating primitive on its own terms."

This timelock capability, still in an early stage, is part of a broader shift in how the industry defines "Bitcoin DeFi."

Historically, decentralized finance for Bitcoin relied on wrapping BTC to interact with Ethereum ETH/USD-compatible protocols, an approach that introduced significant counterparty risks. But innovations like Core's native staking infrastructure are enabling DeFi to exist on Bitcoin itself.

"Bitcoin DeFi is no longer defined by its dependence on external blockchains," Sedo explained. "It's about building directly on Bitcoin's own ecosystem, using its native security to introduce new forms of capital efficiency."

That momentum is now being backed by venture capital.

Core Ventures, the ecosystem fund affiliated with Core Foundation, has deployed over $1 million into 15 Bitcoin-native projects since early 2024, according to a statement Thursday.

The portfolio spans a broad range of innovations: BTC-backed stablecoins, yield protocols, decentralized bridges and even miner-aligned security systems.

Projects such as Solv Protocol, Colend, BitFlux, BIMA Labs and Sats Terminal are quickly expanding the share of the Bitcoin utility market. Several of these projects are also backed by major cryptocurrency investors, including Coinbase Ventures and OKX Ventures.

"We're not here to debate opcodes or the technicalities of the layer one," Sedo added. "We're here to fund the best teams who are pushing the boundaries of Bitcoin's potential and the people who are actively building, not just talking."

With more than 6,000 Bitcoin staked, $500 million in total value locked, and 100,000+ daily active users, Core has rapidly become the anchor of Bitcoin's programmable ecosystem.

Its goal, Sedo said, is to bridge the gap between the world of HODLing and the world of active capital deployment.

"For too long, those two worlds existed apart. But institutions aren't used to simply holding assets; they're built on generating yield from capital. That's how we need to approach opening up Bitcoin to a new era of users and use cases."