Its one thing to own an asset like bitcoin but its a completely different thing to receive cash flow every month from an asset.
I feel like diversifying into other liquid assets that produce income should be wise, for example T-bills. But my mind says that goes against the entire premise of bitcoin and sound money.
Treasuries are fiat, they are just IOUs for fiat meaning they devalue just as much as fiat. So why would I hold T-bills if they constantly devalue while also bringing sovereign and political risk into the mix. You make a yield on the T-bill but for the most part that yield is just compensating for the devaluation of the purchasing power of the T-bills.
Realestate isnt liquid and has its own issues like maintence etc. Stocks come with dilution risk and corporate risk.
So my question is, how can I derive yield from my bitcoin without having to diversify into other assets?
My emotions say diversify, but my mind says "into what"?
byu/slvbtc inBitcoin
Posted by slvbtc
10 Comments
Your dilemma makes total sense man. I was stuck in same place few years back when I had decent bitcoin stack but needed some regular income flow. The yield thing is tricky because most traditional yield sources do exactly what you said – they just compensate for currency debasement while adding their own risks on top.
For bitcoin yield without diversifying, you got few options but each comes with trade-offs. You could lend your bitcoin through some platforms, but then you’re taking counterparty risk which defeats part of bitcoin’s purpose. Mining stocks give you bitcoin exposure with dividends, but that’s still equities with all corporate nonsense. Some people do covered calls on bitcoin ETFs, but again you’re back in traditional finance system.
I ended up keeping most stack in cold storage and just taking small portions to generate yield when I really needed cash flow. Not perfect solution but it kept my bitcoin thesis intact while giving me some breathing room. The harsh reality is that bitcoin’s main value prop isn’t yield generation – it’s wealth preservation and growth over long term.
Maybe consider if you actually need that monthly cash flow or if it’s just traditional finance mindset creeping back in? Sometimes the best yield is just holding the hardest money and letting it appreciate over time.
Be smart. There’s a reason everyone tries and diversifies. It’s so that when there’s a crash you aren’t forced to sell. You already know this. So what’s the hesitation? Waiting for a real experience to justify diversification?
There are some Bitcoin ETFs that use options strategies to generate income. Might be worth checking out.
Here’s one: https://etfs.grayscale.com/bpi
Yes I’ve gone through this phase before, actually I still go through it now.
In the end, when you paid Bitcoin with any assets out there, every thing will trend to zero vs Bitcoin.
So you will just stick with Bitcoin in the end
Personally after stacking decent amounts into bitcoin, I started buying premium bonds (UK Investment) so that I can have a decent emergency fund, and I’m just buying stocks in companies that I use, e.g. I buy fuel at a BP petrol station, I buy BP stock, SSE and Iberdrola generate a vast amount of electricity I use so I Buy them into my stocks and shares ISA (UK tax free investment account) too. These companies also give dividends so I get a bit of cash back for using their service.
Ultimately if you want a tailored answer you should talk to a financial advisor.
I wouldn’t have nearly as much BTC as I do if I had only invested in BTC ironically. Stocks and stock options that can provide a shorter timeframe on return in investment are worth holding/trading. Bitcoin is the best long term investment but stock gains can outpace BTC in the short-medium term. I take profits, pay taxes and rotate those gains into BTC for the long haul. So I stack BTC more efficiently with buying other assets.
Also real estate has the dual purpose of living in it and that can not be replaced. You can tap into the equity for pretty cheap relatively speaking. As a primary investment though yea not so great
Other hard assets like Equities will also increase in value and avoid debasement. I prefer EFTs for diversity. I like SCHD because it is is not as volatile as VOO or S&P 500 and also pays dividends. My portfolio is roughly 7% BTC.
Honestly feels like you can’t have both full BTC conviction and safe yield any yield on BTC usually means taking on extra risk somewhere, so it’s kinda a tradeoff not a free lunch.
Only thing I might diversify is in different wallets
I get the tension. Wanting yield but also not wanting to dilute the whole point of holding bitcoin.
The honest answer is there isn’t really a native, risk free way to generate yield from bitcoin itself. Most yield options end up introducing counterparty risk, rehypothecation, or some form of leverage behind the scenes. That kind of defeats the reason a lot of people hold it in the first place.
So it becomes more of a mindset shift. Either you treat BTC as the non yielding, hard asset part of your stack, or you accept some risk to try and squeeze yield out of it. There’s no clean middle ground right now.
Some people just separate goals. Hold BTC for long term purchasing power, and if they want income they look elsewhere and accept the tradeoffs. Not perfect, but it avoids forcing bitcoin to be something it isn’t.