With the dominant cryptocurrency now playing the role of “digital gold,” Solv aims to help institutional investors maximize yield from Bitcoin.
Solv Protocol Secures $10M to Bring Bitcoin Solutions to Institutional Investors
The U.S. Securities and Exchange Commission (SEC) paved the way for institutional Bitcoin (BTC) adoption in 2024 by approving the first spot Bitcoin exchange-traded funds (ETFs). Recently, Solv Protocol, a Bitcoin staking platform, finalized a $10 million “Bitcoin Reserve Offering” to capitalize on the growing institutional interest in BTC.
Satoshi Nakamoto originally conceived Bitcoin as digital cash, but its disinflationary issuance policy, coupled with significant price appreciation, has transformed it into a safe haven asset often referred to as digital gold. However, the challenge with holding Bitcoin is that it does not generate yield; investors only realize profits by selling their BTC. To address this issue, Solv Protocol offers staking yield to institutions holding Bitcoin. The funds raised will be used to implement various yield-generating strategies.
“When institutions put their Bitcoin into our reserve, we won’t let it be idle,” stated Solv co-founder Ryan Chow in an interview with Bitcoin.com. “We will deploy it into BTC yield-generating vehicles.”
Chow explained the process: institutions deposit Bitcoin with Solv and receive yield-bearing instruments similar to convertible bonds. “It’s very similar to Strategy,” Chow noted, referencing how MicroStrategy (MSTR) often finances its Bitcoin acquisitions by issuing debt through convertible bonds.
Chow provided examples of assets Solv invests in to attract institutional investors with high yields. One option is stablecoins like Ethena’s USDe, which currently offers a 4% yield but has reached as high as 56% in the past. Solv also invests in various stablecoins to diversify their cryptocurrency portfolio.
“We use the BTC as a pledge to borrow stablecoins and then invest those stablecoins in multiple ways,” Chow explained.
Solv has plans for additional fundraising rounds for its reserve and has already attracted several prominent stakeholders, though Chow has opted not to disclose their identities. He mentioned that significant players in the cryptocurrency space have committed funds for future fundraising efforts.
“We cannot disclose their names,” Chow reiterated. “But for the follow-up rounds like round two and three, we already have a lot of institutions that have committed in the pipeline.”
Comments (0)