By: Wyatt O’Rourke – Founder of Basilic Financial, Co-Founder Pax Partners, Co-Founder Bitcoin for Financial Services Media, Author ‘The Bitcoinization of Finance’
Many Bitcoin holders eventually ask the same question. I have this asset I believe will appreciate over decades. Can it also produce something in the meantime?
The honest answer is that quality yield on Bitcoin is real but rare, and most of what gets marketed as Bitcoin yield does not survive our scrutiny. At Basilic, evaluating these products is a growing part of what we do for clients. What follows is how we think about the emerging bitcoin investment product space and how we evaluate opportunities.
What Bitcoin Yield Actually Means
The first discipline is definitional. If a product promises yield on Bitcoin, the return has to be denominated in Bitcoin. A strategy that hands you dollars while your Bitcoin stack stays flat is not yield on Bitcoin. It is a dollar return that happens to use your Bitcoin as the engine. Both can be worthwhile, but they are different animals.
We do not operate in the “DeFi” system and presume any opportunities where Bitcoin is wrapped, used as collateral for other coins, staked, or anything else of the sort. We consider these opportunities illegitimate and not aligned with our principles, so they are not considered. Once you hold that line, the legitimate paths to generate bitcoin native yield narrow to two.
The first is a pure financial play. Futures, basis trades, and similar structures generate a return from market mechanics rather than from any underlying enterprise. These are sound investment strategies, but they carry counterparty and execution risk, and the return exists only as long as the market condition that produces it persists.
The second is an operating business that earns Bitcoin. A company that provides a genuine service, gets paid in Bitcoin, and distributes a portion back to participants in a structured product is producing yield the old-fashioned way, through value creation rather than financial engineering. This is harder to build and rarer to find, which is precisely why it deserves attention when it appears.
The distinction matters because the two carry completely different risk profiles. One depends on a market spread holding. The other depends on a business executing. Knowing which one you are actually buying into is the beginning of the due diligence process.
A Market That Exists for a Reason, and for a Season
There is a broader phenomenon emerging. I have dubbed it the ‘fiat return on Bitcoin exposure’ market.
It describes a specific opportunity that exists during a specific window of time. Bitcoin is advancing through the currency maturation cycle, transitioning from a store of value toward a medium of exchange. During that transition, there is high demand for both dollars and Bitcoin. That simultaneous demand creates room for products that bridge the two, that let capital sit in Bitcoin while throwing off a dollar-denominated return.
The opportunity for investors is to identify investment issuers that have built products with the highest dollar denominated return and the least synthetic bitcoin exposure. Evaluating that balance is where the work comes in.
This will not be a permanent feature of the ecosystem. It is a phase. As Bitcoin matures and the monetary system reorganizes around it, the conditions that make these products possible will change, and some of them will simply stop making sense. Understanding that a given investment opportunity is a product of the moment, rather than a permanent fixture, is central to evaluating how long its thesis actually holds and your risk vs reward analysis.
Evaluating Bitcoin Investment Product Design
The product design in this space is evolving quickly, and it helps to see it as a sequence of iterations searching for product-market-fit rather than a fixed menu of offerings.
My read on the landscape and development timeline to date;
- V1 – MSTR Common Stock
- V2 – STRC Perpetual Preferred Stock
- V3 – What’s Next
The first version was MicroStrategy common stock (MSTR). The simple encapsulation of the basic widely held investment thesis – buy the equity, get leveraged Bitcoin exposure through a company that keeps acquiring it. A large publicly traded company has access to a cheaper cost of capital, they can acquire more Bitcoin than you can, so the shareholder ends up with a higher “bitcoin-per-share” than what you would be able to procure yourself. Crude, effective, and entirely dependent on the equity behaving as a Bitcoin proxy, the management team executing on their objectives, and all the volatility that implies. The idea and go-to-market was novel at the time of its release/full embrace by Strategy Chairman and Bitcoin enthusiast Michael Saylor. Credit where credit is due.
The Strategy team continued to innovate over the last ~6 years ultimately leading to what I deem the second evolution of Bitcoin investment product design with structures like Stretch (STRC). STRC is a perpetual preferred stock that was built to deliver a more defined income stream against a Bitcoin-linked balance sheet. More advanced, intricate, and ultimately targeted at the holder who wants something closer to a yield instrument rather than the volatility inherent in the common stock or spot Bitcoin. STRC was launched in July 2025 and has raised roughly $8.5B since inception. An early indicator for the market’s receptiveness to the developing market of bitcoin investment products.
The third version has not fully arrived yet, and here I will offer an opinion rather than a fact. I think the next generation of these products will be built around a more deliberate combination of components, engineered to give the holder something the first two versions could not.
What Quality Bitcoin Investment Design Looks Like
When we evaluate Bitcoin investment products, we are looking for three things working together packaged into an investible instrument.
The first is a real-world hard asset that is non-correlated with Bitcoin. Its job is to neutralize some of the volatility of spot Bitcoin, to act as ballast for the principal value of the investment when Bitcoin moves the way Bitcoin moves.
The second is spot Bitcoin itself, so that the holder genuinely participates in the appreciation they came for. Exposure to the asset must be real, not synthetic. Ideally investors can take delivery or payments of bitcoin directly.
The third is an income component, a dividend/distribution that gives the holder cash or BTC in hand rather than asking them to wait entirely on price or defined liquidation event for a payout.
Put those three together and you describe a product where an investor can share in spot Bitcoin appreciation, be cushioned to the downside, and receive a distribution along the way. That combination is difficult to build well, and most products that claim it deliver only one or two of the three convincingly. Testing whether all three are genuinely present, and balanced, is the bulk of our analysis. If only certain aspects of these criteria are met, we grade the opportunity proportionately.
How We Use This
None of this is a recommendation to buy anything, and it is not a description of any particular product a reader should pursue. It is the framework we bring when a client is presented with an opportunity and wants to understand what they are actually looking at. Is the yield denominated in Bitcoin or in dollars. Is the return financial or operational. Does the structure depend on a market condition that may not last. Are all three design components really there, or only advertised.
These are the questions that separate a durable product from a story. Helping clients work through them, carefully and without hype, is a core part of how we serve Bitcoin holders at Basilic. Prosperity with purpose means owning sound money with clear eyes, and that clarity starts with knowing exactly what you own.
Important Disclosures
Basilic LLC is a registered investment adviser. This platform is solely for informational purposes. Investing involves risk and possible loss of principal capital. Comments by viewers or third-party rankings and recognitions are no guarantee of future investment outcomes and do not ensure that a viewer will experience a higher level of performance or results. Public comments posted on this site are not selected, amended, deleted, or sorted in any way. If applicable, certain editing of personal identifiable information and mis information may be deleted.
Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Information expressed does not take into account your specific situation or objectives, and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance. This is not tax, legal, or investment advice.
The opinions expressed herein are those of Wyatt O’Rourke, not Basilic LLC and are subject to change without notice. The opinions referenced are as of the date of publication and are subject to revision due to changes in the market or economic conditions and may not necessarily come to pass. Any opinions, projections, or forward-looking statements expressed herein are solely those of the author, may differ from the views or opinions expressed by other areas of the firm, and are only for general informational purposes as of the date indicated.
Full Disclaimer: https://wyattorourke.com/disclaimer/
My work focuses on bridging the often-disparate worlds of tradition and innovation. I seek to offer my clients and peers a fresh, informed perspective on wealth management. I am interested in the intersection of behavior, incentives, and markets. My thoughts are inspired by the works of Srinivasan, Booth, Alden and many more. My values stem from my Christian faith. My hobbies, marriage, and involvement in communities keep me inspired. To stay active, I enjoy skiing, golfing, camping, and hunting. #1 YIMBY and urbanist. Founding member of The Space Denver.