Coinbase plans to launch a Bitcoin Yield Fund for non-U.S. institutional investors on May 1, promising annual returns between 4% and 8%. The fund will prioritise security, keeping assets in cold storage. There is a growing need for such funds due to Bitcoin’s different yield characteristics compared to other assets. Last week, Bitcoin products saw significant inflows, highlighting rising institutional interest.
Coinbase, one of the leading cryptocurrency exchanges, is gearing up to introduce a Bitcoin Yield Fund specifically for institutional investors outside of the U.S., set to launch on May 1. This new fund aims to provide investors with an annual net return ranging from 4% to 8%, which sounds attractive for those interested in the cryptocurrency space.
The backbone of this fund is its design, created explicitly for institutional investors looking for exposure to Bitcoin whilst keeping a conservative approach to returns. Bitcoin, in comparison to altcoins and standard financial products like Treasury bills, lacks inherent yield generation, making this kind of initiative essential. Coinbase has expressed that this fund strives to mitigate the potential risks faced when engaging with Bitcoin.
Coinbase also shared that the fund will employ qualified custodians and target a strategic asset capacity of around $1 billion. To ensure security, assets will stay in cold storage, drastically reducing risks from moving funds unnecessarily. They plan to utilize third-party custody integrations for trading, which could help lessen counterparty risks significantly.
In a sign of cautious investment, the fund will refrain from pursuing high-risk Bitcoin loans or systematic call selling, keeping the focus on stability and security. This conservative framework aligns with an increasing demand for reliable yield options among institutional Bitcoin holders.
This move towards a Bitcoin yield fund comes at a time when the interest from institutional players is surging. Coinbase noted that last week alone, digital asset investment products saw inflows totalling $3.4 billion, marking the third-highest on record since December 2024, with Bitcoin attracting $3.18 billion of that.
The recent inflows suggest a growing institutional appetite for Bitcoin as an investable asset, with Bitcoin-focused products now managing a whopping $132 billion in assets – levels reminiscent of early February this year.
