Function Secures $10M to Transform Bitcoin into a Yield-Generating Powerhouse for Institutions
The crypto infrastructure startup Function has raised $10 million in a seed funding round led by Galaxy Digital, with participation from Antalpha and Mantle, marking a pivotal step in institutionalizing bitcoin yield strategies. The funding will accelerate the development of FBTC—a fully reserved, 1:1 bitcoin-backed asset designed to integrate seamlessly with decentralized finance (DeFi) while maintaining institutional-grade custody controls.
FBTC has already amassed $1.5 billion in total value locked (TVL), signaling strong demand for yield-bearing bitcoin products among corporate treasuries and asset managers. Unlike traditional “wrapped” bitcoin solutions, FBTC prioritizes transparency and security, ensuring users retain full custodial ownership while earning passive income through DeFi protocols. Galaxy Digital’s involvement as both investor and strategic partner lends credibility, with the firm contributing liquidity, governance frameworks, and risk management expertise to scale FBTC’s adoption.
Why This Matters:
- Shifting Institutional Demand: Function CEO Thomas Chen predicts that by 2026, passive bitcoin holding will be obsolete. Institutions now seek assets that “work as hard as cash,” mirroring traditional finance’s yield expectations .
- DeFi Integration: Bitcoin remains underutilized in DeFi due to its non-programmable nature. FBTC bridges this gap by enabling composability without sacrificing security 3.
- Regulatory Compliance: The 1:1 reserve model mitigates regulatory risks, appealing to cautious institutional investors .
Industry Implications:
With Galaxy Digital’s backing, Function is poised to redefine bitcoin’s role from a store of value to a productive asset class. As Chen notes, “Forward-looking firms will win the next era of bitcoin yield”—a vision aligning with growing institutional appetite for crypto-native financial tools.
