Lombard and Bitwise Launch Institutional BTC Custody Yield Solution, Targeting $500 Billion in Assets Under Management

Gate News reports that on March 24, Lombard and Bitwise Asset Management announced a partnership at the Digital Asset Summit in New York. They introduced a program allowing institutions to earn yields and lend BTC for collateral without leaving custody. The program targets the amount of BTC held in institutional custody, with Lombard estimating approximately $500 billion worth of BTC under institutional management. Bitwise will develop yield strategies that combine DeFi lending with tokenized real-world assets, while the decentralized lending protocol Morpho will provide infrastructure for BTC collateralized lending. The platform uses native Bitcoin tools such as partial signature transactions and time locks to verify collateral, enabling on-chain representation of positions without transferring or re-pledging the underlying assets. Phillips stated that Bitcoin Smart Accounts can simultaneously reduce custody, cross-chain bridge, and counterparty risks. The program is aimed at high-net-worth individuals, asset management firms, and corporate treasuries, with plans to launch in Q2 2026 and expand coverage by adding more custodians and protocols. According to DeFiLlama data, the total value locked (TVL) in BTC across DeFi is approximately $2.93 billion, with a market cap of about $1.4 trillion; as of press time, Babylon Protocol’s total TVL is around $2.8 billion, and Lombard’s is approximately $744 million.