RootstockLabs launched Rootstock Institutional, with the goal of deploying $260 billion of institutional Bitcoin in DeFi.
Summary
- RootstockLabs launched Rootstock Institutional to investigate institutional Bitcoin use
- Major institutions currently own $260 billion worth of BTC, which is still dormant
- Institutions could deploy this idle BTC in DeFi, allowing investors to earn returns
More than 2.6 million Bitcoin (BTC) held by institutions remains idle, but this could soon change. On Tuesday, October 14, RootstockLabs, a key contributor to Rootstock, the first Bitcoin layer-2, announced the launch of Rootstock Institutional.
The new team will focus on ways institutions can leverage BTC’s DeFi potential. Institutions could use Rootstock, a DeFi layer for Bitcoin, to earn returns on their BTC. Specifically, institutions can use BTC for lending and borrowing, along with other on-chain return strategies.
“The market has evolved beyond simple Bitcoin ownership. Institutions that manage significant Bitcoin treasuries are looking for sustainable, transparent on-chain frameworks without jeopardizing their long-term position,” said Richard Green, Managing Director of Rootstock Institutional and Ecosystem at RootstockLabs.
99% of institutional Bitcoin generates negative returns
According to RootstockLabs’ Institutional BTCFi ReportInstitutions own 2.6 million BTC in ETFs, corporate government bonds and mining reserves. However, 99% of this BTC generates negative returns because companies have to pay custody fees, which range from 0.1% to 0.5% per year.
Nevertheless, these reserves offer significant financial opportunities for their holders. In March 2025, Bitcoin-native DeFi grew 2,700% year over year to $8.6 billion in total value. However, this figure still only amounts to 0.79% of the BTC supply, compared to 50% for Ethereum.
“Bitcoin’s evolution from a pure store of value to a productive financial asset represents one of the most important opportunities in digital finance,” said Richard Green. “We are already seeing this firsthand, family offices, web3 funds, exchanges and bitcoin-first companies are actively working with us to stake their Bitcoin on Rootstock.”
