There are probably hedge funds or other large institutions who want to trade USDC or BTC without owning it. I am not a professional investor, so I don't understand quite why they wouldn't just buy USDC or Bitcoin outright and trade it...
But, every market needs liquidity and you basically are providing it by lending out your assets. There are some protocols emerging which lets you keep ownership of your coins and still lending them out.
I would go to BlockFi or other 2-3 bigger institutions (maybe even Kraken or Coinbase) and lend USDC out for currently 10%.
I don't know about taxes much, it depends on the country. All crypto is tax free in Germany after 1 year, so people mostly hold for a year and sell.
I am lending out USDC because, well, where do I get 10%? Also, lending out BTC means you can still keeping it while profiting from it.
Few people here understand that people actually don't want to sell Bitcoin since it seems to be a hard asset, and you don't want to get rid of it. So you can profit from the gains on the BTC price WHILE ALSO profiting around 5% a year of it. It's like a dream.
I don't expect this to go on for ever, but the market needs liqudity and its a perfect time to do so.
[0] https://www.realvision.com/shows/the-interview-crypto/videos...