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- 1 Bitcoin is showing all signs of a bullish trend with ETFs and halving.
- 2 However, the users have limited options for staking it to maximize profits.
- 3 DeFi emerges as the best option for many holders to earn yields.
While Bitcoin is the star of the crypto show, it does see bad days sometimes. But right now, it’s going through a purple patch due to various reasons. First of all, there’s the ETF frenzy that started with finance major BlackRock filing for it. Then, Bitcoin halving is scheduled to happen between April to May 2024. Historically, this event kicks off a bullish trend that stays for quite some time. Among all that chaos, traders are trying to take advantage of this time.
How Are Upcoming Events Shaping BTC?
Bitcoin has once again drawn all the eyeballs towards it. With so many prospects in the future, it’s attracting a large number of investors. It has outperformed the rest of the tokens including Ethereum. So, everyone is keen to own some Bitcoin at this point. However, it’s important to look at some more aspects before getting into the fray.
Promising ETFs
If one begins with ETFs, the overall scenario looks favorable for the crypto community. The digital asset users are weighing on the prominence of BlackRock. They strongly feel that a company of this size and influence is bound to get approval. With BlackRock leading in the front, the investors are being quite hopeful. Notably, the original crypto is charting new territories with ordinals. This new concept is opening the blockchain to NFTs and other possibilities.
The Consensus Mechanism Angle
Amidst the talks of long-lasting uptrends, some other speculations are emerging. Some talked about Bitcoin switching to a different consensus mechanism. But BTC refuted such claims and said it has no intent of going to Proof-of-Stake.
Notably, it is better than Proof-of-Work in terms of efficacy and energy consumption. Despite that, there seems to be no indication of Bitcoin changing its consensus protocol. On the other hand, some projects want to use it as an asset for securing their staking projects.
Babylon, a BTC re-staking protocol is giving rise to new possibilities. This fully-native protocol uses smart cryptographic tricks to enhance the blockchain’s abilities. The coin holders don’t need to bridge the BTC anywhere else using this mechanism. It keeps the chain’s performance intact while making it scalable. Nonetheless, Babylon is currently in the testnet and will be launched on the mainnet in 2024.
Thus, crypto users can’t use it to stake their precious coins right now. Moreover, they won’t be able to use it for staking purposes in the post-halving period. As a result, there’s no other way to stake BTC right now. Still, they can earn a yield on it easily.
How is DeFi Staking Making it Possible?
Decentralized finance is enabling crypto users to earn a yield on Bitcoin. Though it directly doesn’t on BTC, it does that through Ethereum and other chains. Let’s understand this scenario with a relevant example. WBTC/tBTC pool on Curve yields 0.3% APY for the holders. Although these tokens work on Ethereum, they follow BTC price one-to-one.
The swap fees between these wrappers generate extra incentives from Curve. In addition, users can explore other options interlay for staking BTC in DeFi and BNB Chain. If they’re ready to dilute the BTC into another asset, they can find higher yields too.
Yet, users shouldn’t rule out the risk of the BTC wrapper failing to do its job. Furthermore, various exchanges offer the ‘Earn Program’ for Bitcoin staking.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
