To generate passive income from your holdings, you inevitably have to guarantee third party services direct access to your funds. And if they have access to your funds, it means it's not safeguarded anymore... Hacks, scams and inside jobs are possible to happen, and in positive case, your money is gone forever. There aren't assurances you are going to be reimbursed, at least not totally.
Not only that, but obtaining returns with Bitcoin is very difficult due to the price fluctuation and crazy rises. No one can take your money and then pay high profits on it. In the end, banks and exchange services are profit-making institutions, not charitable ones.