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Bitcoin News Update: Institutions Transform Bitcoin into a Yield-Generating Asset, Driving Unprecedented Growth in Credit Demand

Bitcoin News Update: Institutions Transform Bitcoin into a Yield-Generating Asset, Driving Unprecedented Growth in Credit Demand

Bitget-RWA2025/11/25 01:32
By:Bitget-RWA

- Bitcoin-backed credit demand surged to record levels as institutions shift from passive holding to active deployment of digital assets. - Market forecasts predict a 12.75% CAGR for crypto through 2033, driven by institutional investments, DeFi adoption, and regulatory clarity. - Strategy's $7.7B in Bitcoin-backed credit offerings and BTCFi's $9B TVL growth highlight institutional efforts to monetize Bitcoin beyond price appreciation. - India's private credit AUM rose to $17.8B by 2023, while DeFi project

Demand for Bitcoin-backed loans has reached unprecedented heights as more institutions enter the space, shifting from simply holding digital assets to actively utilizing them.

, the crypto industry is expected to expand at an annual compound growth rate of 12.75%, propelled by institutional capital, the rise of decentralized finance (DeFi), and clearer regulatory frameworks. This momentum is highlighted by companies such as , which in 2025 alone, using structured finance to provide investors with variable USD returns.

This evolution signals a broader transformation in the market, with

increasingly recognized as a corporate asset. Institutions are now looking for ways to generate income from their Bitcoin holdings, rather than relying solely on price increases. , "Institutions want their bitcoin to be productive-earning rewards, unlocking liquidity, or serving as collateral". This appetite has , with the total value locked jumping from $200 million at the end of 2024 to $9 billion by early 2025.

Although spot Bitcoin ETFs have

—totaling $3.79 billion in November—new products like and ETFs have drawn $710 million in net investments, indicating a shift toward broader crypto diversification. Despite Bitcoin's price swings, institutional involvement remains strong. for the third quarter of 2025, driven by the expansion of Bitcoin ATM networks and licensing of intellectual property.

The real estate industry has also

, with India standing out as a major player. Knight Frank noted that private credit assets under management in India soared from $0.7 billion in 2010 to $17.8 billion in 2023, making up 36% of Asia-Pacific fundraising between 2020 and 2024. This surge is attributed to developers turning to non-bank funding as traditional lending tightens, with .

Within DeFi, platforms like Mutuum Finance showcase the rapid adoption of tokenized lending.

Bitcoin News Update: Institutions Transform Bitcoin into a Yield-Generating Asset, Driving Unprecedented Growth in Credit Demand image 0
The project’s on-chain lending approach seeking returns in an environment of low interest rates.

Nonetheless, regulatory and market risks remain. Bitcoin’s recent drop below $85,000 in November—the steepest monthly decline since 2022—has sparked fears of a looming “death cross” technical pattern. Still,

have often coincided with market bottoms, providing some cautious optimism.

As the digital asset landscape matures, institutions are focusing on building scalable systems and ensuring regulatory compliance.

that their business model integrates software, structured finance, and digital assets to operate as an enterprise rather than a passive investment fund. This reflects a wider industry movement, with in the first half of 2026, thanks to embedded credit products and the expansion of UPI infrastructure.

With Bitcoin’s total market value approaching $1.3 trillion and private credit markets growing worldwide, the fusion of digital assets and traditional finance seems inevitable.

, the next wave of adoption will depend on integrating custody solutions and achieving regulatory certainty—both crucial for institutional-scale BTCFi growth.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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