According to TechFlow, investors often cite the "digital gold" scenario as the main reason for Bitcoin's rise, that is, BTC will be used as a hedge against inflation. Gold is used as an inflation hedge, but its returns only come from price appreciation.
Most BTCfi investors believe that even if only 5% of circulating BTC enters yield-generating protocols, it could expand the space 100x. However, with BTC acting more like gold than a yield-generating asset, this expectation may be overly optimistic.
The first conclusion is that some valuations may already be high. The second conclusion is that if you accept BTC as a tool to fight inflation, you may need to re-examine your BTCfi theory.
While there are doubts about the BTCfi theory, it is also necessary to consider the opposite scenario. Currently, wBTC accounts for about 0.7% of the BTC supply, while Celsius, BlockFi, and Voyager hold a total of about $5 billion in BTC, accounting for about 1.1% of the total supply. These indicators do not show a positive change in the demand for BTC yields.
Some argue that because BTC is easier to store and trade than gold, there may be a higher demand for yield-generating opportunities. However, the active supply of BTC has been declining since 2012.
In summary, the BTCfi thesis faces challenges at current valuations because philosophically and economically, there is little overlap between BTC holders and yield seekers.
