Macro analyst Luke Gromen pointed out that the fact that Bitcoin (BTC) itself does not generate yield is not a weakness, but rather a reason for its greater safety as a store of value.
“If you are earning yield, you are taking on risk,” Gromen said on the Coin Stories podcast to Natalie Brunell on Wednesday, responding to questions about critics who dismiss Bitcoin (BTC) for favoring yield-generating assets.
“Anyone saying that is demonstrating their Western financial privilege,” he added.
Gromen cited the collapse of the crypto exchange FTX in November 2022 as an example. “You know, when you staked on FTX, what happened?” he said.
“The reason your money in the bank earns deposit interest is because you are taking on risk in a capitalist society,” he said. “Everyone thinks that is their money, but it is actually the bank's money,” he added.
These comments came in the context of a comparison between Bitcoin (BTC) and Ethereum (ETH), where Ethereum (ETH) supporters argue that its proof-of-stake mechanism allows users to earn rewards through staking, making Bitcoin (BTC) less appealing to traditional investors.
Just as banks pay interest to attract deposits and enhance lending capacity, Ethereum (ETH) holders earn rewards through staking ETH, which helps activate and secure network validation nodes.
According to Nassar Achkar, Chief Strategy Officer of CoinW exchange, institutional clients are increasingly allocating funds to ETH due to its yield potential from staking and its role in the tokenized ecosystem.
Data from StrategicETHReserve shows that as of the time of writing, companies publicly holding ETH own about 4.13% of the total supply, valued at approximately $23.01 billion.
Although Bitcoin (BTC) is not purchased for yield, investors still see many advantages. Investors generally view Bitcoin (BTC) as a hedge against inflation, government control, and economic instability, and it is regarded as a store of value, often referred to as "digital gold."
According to BitcoinTreasuries.NET, companies publicly holding Bitcoin (BTC) currently hold about $119.65 billion (as of the time of writing).
While Bitcoin (BTC) does not support native staking features, holders can still earn yield through centralized lending platforms, Wrapped Bitcoin (WBTC) on Ethereum (ETH), and Bitcoin (BTC)-related networks like Babylon and Stacks.
Related: Solana shows bullish signals again, with a similar historical pattern triggering a 1300% surge in SOL.
Original article: “Opinion: Criticizing Bitcoin (BTC) for lacking yield actually showcases your ‘Western financial privilege’”
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