Opinion by: Thomas Chen, CEO of Function
Bitcoin Exchange Traded Funds (ETFs) have solved the access problem but remain inactive. What is needed now are credible, expressible, institutionally graded pathways to transform bitcoin exposure into scalable production.
Bitcoin is evolving from a digital store of value to a form of productive capital. Continuing to treat Bitcoin (BTC) like digital gold – storing it for long-term appreciation – misses its true potential as a reserve asset of the digital age.
Bitcoin is not just a store of value. It is programmable collateral. This is productive capital. This is the basic layer for institutional participation in higher finance.
The October 10 liquidation incident occurred due to failure to perform the core risk management function effectively. On the other hand, this event also proved that Bitcoin production projects emphasize security and simplicity through which success will be achieved. As volatility increased, Bitcoin production projects saw an increase in market arbitrage opportunities when the spread widened. Market-neutral strategies that were not highly leveraged may have weathered and actually outperformed when they profited on market dislocations.
Composable, capital-efficient infrastructures have evolved, and transparent and auditable production paths now exist. Institutional deployment frameworks have matured both technically and legally. Even so, most bitcoins held by institutions have the potential to offer much higher yields.
Bitcoin as Wikipedia
The strategic management team has been able to financially engineer the acquisition of BTC with Fannie. Maybe other BTC to treasure digital assets. Don’t be either. A copy trading strategy is not a strategy at all. Eventually, the BTC deposit phase will end, and the BTC deployment phase will begin.
In traditional finance (tradify) markets, allocators do not park their assets indefinitely. They rotate, hedge, optimize and constantly adjust them for maximum yield (risk adjusted). However, with Bitcoin, allocators are still in the accumulation phase, but eventually, like any other asset, they will need to start putting their Bitcoins to work.
What does this mean for allocators? It is acting like productive capital with Wikipedia known and trusted framework. Think short-term loans that support substantial suicide. Additionally, market-neutral basis strategies that do not depend on bitcoin price appreciation, liquidity provision on vetted and compatible institutional platforms, and conservative or low-risk call programs with clear, preset risk limits.
Every route should be transparent and easy to audit. It should be structured for duration, counterparty quality and liquidity. The goal is not to maximize production. It has to improve volatility within the mandate. If the yield is too low compared to the risk profile, the risk/reward of capital deployment is not worth it for many, so some liquidity providers (LPS) are held.
What we need is an operating model that allows us to use it without violating compliance standards, while keeping it simple. Once production is safe and standardized, the bar shifts, and stops the liability that makes capital useless.
As of Q4 2024, there were over 36 million active mobile crypto wallets globally. This is a record high and a sign of the inclusion of a wider ecosystem where retail is learning to transact, lend, stake and earn. A similar scenario is possible for institutions that are significantly more capital intensive and operate under stricter mandates. Many people still see Bitcoin as just a repository, not yet fully deploying its potential – and in doing so, in a fully compliant manner.
Changing deployment visibility
According to a 2025 survey, there are plans to increase crypto allocation among institutional investors. Allotment growth can only reach its full potential, however, if operational requirements are met with solid infrastructure to support it.
The gears are already turning. Arab Bank Switzerland and XBTO are introducing a bitcoin product as some central exchanges prepare to launch their own self-generated bitcoin fund for institutional clients, giving access to the creation of BTC.
These are preliminary indications, not confirmation. What matters is the direction of travel: whether production is delivered through creditable channels, with separate assets and a clear negative framework. Institutions want low-volatility revenue from onchain mechanics, but wrapped in controls they already understand.
What is happening here is not speculation. This is basic. Bitcoin is being built into a programmable infrastructure, adding more avenues of production beyond its already strong reputation as “digital gold”. It’s no longer a niche interest and is being actively pursued by institutions seeking liquidity and low-volatility income strategies—only this time, they’re Onchin.
Bitcoin is undergoing a visible maturation. Indeed, this is a major structural trend where productive assets are winning allocations. What the market needs now is not more access. These are more ways to use Bitcoin productively.
Production of compatible infrastructure composites
Upgrading quality to performance means defining success in terms that are measurable and quantifiable. Also think in terms of realized versus implied yields, slippage and target drawdown tolerances – plus, financing costs, suicide and liquidity timing under stress.
When the tools are in place to productively deploy BTC, while adhering to institutional custody, risk management and compliance, quality will be upgraded and efficiency will change. Because doing nothing becomes exempt, Bitcoin’s role in the economy shifts from passive allocation to productive, production-bearing capital. Allocators can no longer afford to sit idle.
Institutions that are quick to implement these changes in standards will secure the lion’s share of liquidity, structure and transparency that composable infrastructure offers.
The window is already open to define best practice.
Now is the time to formalize policy, launch small, auditable programs that scale and generate more than just access. Now is the time to deploy exposure in a productive, transparent and fully compliant manner, and seize Bitcoin’s full potential.
Opinion by: Thomas Chen, CEO of Function.
This article is for general information purposes and is not intended and should not be construed as legal or investment advice. The views, opinions and views expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of QuintalGraph.
