Coinbase is launching the Coinbase Bitcoin Yield Fund on May 1, designed for non-US institutional investors seeking Bitcoin exposure. The fund targets annual net returns of 4% to 8%, relying on a cash-and-carry strategy for yield generation. Supported by backers like Aspen Digital, it aims to lower operational risks compared to existing Bitcoin yield funds, addressing a gap in the market for passive income options in Bitcoin.
Coinbase, the prominent cryptocurrency exchange that ranks third worldwide by trading volume, has revealed plans to launch the Coinbase Bitcoin Yield Fund on May 1. This initiative will provide institutional investors, particularly those located outside of the United States, with an opportunity to gain exposure to Bitcoin (BTC).
According to a blog post by Coinbase published on April 28, the fund aims to achieve an annual net return ranging from 4% to 8% on Bitcoin assets. The announcement highlights the growing interest among institutions seeking to earn yields on their Bitcoin holdings.
In its statement, Coinbase Asset Management expressed enthusiasm about introducing this new fund: “To address the growing institutional demand for bitcoin yield, Coinbase Asset Management is excited to introduce the Coinbase Bitcoin Yield Fund (CBYF).” The fund has already garnered support from several investors, including Aspen Digital, a regulated asset management firm based in Abu Dhabi.
The yield for the Coinbase Bitcoin Yield Fund will be derived using a cash-and-carry strategy, which takes advantage of discrepancies between the current spot price of Bitcoin and its derivatives. Notably, unlike other cryptocurrencies such as Ether (ETH) and Solana (SOL), Bitcoin doesn’t allow holders to generate passive income through staking, a gap this fund aims to close.
As the announcement clarifies, Bitcoin yield funds have arisen to tackle this very limitation, although they typically expose institutional investors to considerable investment and operational risks. In response, the Coinbase Bitcoin Yield Fund aims to mitigate these risks, thus making the investment more attractive for institutional clients with specific risk thresholds.
