Bitcoin BTC/USD exchange-traded funds (ETFs) providing staking capabilities may considerably enhance institutional engagement by placing idle property to work, in keeping with Charlie Hu, co-founder of Bitlayer, a Bitcoin Layer 2 answer supplier.
In an interview with Benzinga on the sidelines of Eth Denver on Thursday, Hu highlighted the potential regulatory approval of staking ETFs as a pivotal growth, emphasizing their function in activating Bitcoin held in custody for yield era.
His feedback come as Bitcoin Layer 2s acquire traction for enhancing scalability and utility.
Hu highlighted the present limitations of Bitcoin ETFs, which have seen over $100 billion in purchase strain since their approval final yr.
“SEC approving the Bitcoin ETF staking. That is the one speculating, we do not know when precisely and whether or not or not it may occur,” he stated, expressing hope for approval in 2025.
He famous that such a transfer would enable ETF companies to shift Bitcoin from passive custody to lively use, a change he believes may reshape institutional participation within the crypto market.
Drawing on his expertise with Polygon POL/USD and Polkadot DOT/USD, Hu urged a number of financial and safety advantages of Bitcoin rollups over sidechains.
“As soon as now we have an ecosystem, now we have loads of transactions, we’ll contribute within the charges with the Bitcoin settlement,” he defined, detailing how Bitlayer’s 28 million transactions on its mainnet are already producing charges for Bitcoin miners.
He argued that this alignment helps the community’s safety funds, as halving occasions cut back miner rewards, a essential situation for Bitcoin’s lengthy-time period resilience.
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Hu additionally addressed Bitcoin’s evolution from digital gold to a broader monetary device, pushed by Layer 2 improvements.
“Lots of the Bitcoin has been sitting on the chilly pockets not doing something, not getting any yield, not any interest within the final 10 years, 15 years,” he stated, suggesting that staking and DeFi use circumstances may meet rising demand from new customers and establishments.
Bitlayer’s method, leveraging zero-data proofs and BitVM for belief-minimized bridging, goals to unlock this potential, although he acknowledged challenges in balancing price and safety for on-chain settlement.
Wanting forward, Hu sees Bitcoin Layer 2s enabling decentralized funds, stablecoins, and on-chain choices markets inside 5 years.
Nonetheless, his give attention to staking ETFs highlights a close to-time period alternative to combine institutional capital with Bitcoin’s increasing ecosystem, probably catalyzed by regulatory readability below a professional-crypto U.S. administration.
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