Coinbase Introduces Bitcoin Yield Fund With 4–8% Return Potential - Cryptured.com

With the launch of its Bitcoin Yield Fund, Coinbase hopes to provide non-US investors with steady yields of 4–8% that are paid out in Bitcoin.

Coinbase unveils 8% Bitcoin Yield Fund for corporate investors

In order to provide investors outside of the US with long-term returns in Bitcoin, Coinbase Asset Management is about to introduce a new institutional product. Announcing the Coinbase Bitcoin Yield Fund (CBYF) on Monday, the fund is set to launch on May 1 and seeks to access more than $1 trillion in bitcoin liquidity to provide annualized returns of 4% to 8%.

Ethereum and Solana are examples of Proof-of-Stake (PoS) cryptocurrencies that provide native staking dividends, whereas Bitcoin’s Proof-of-Work (PoW) consensus does not have a built-in mechanism for making passive income.

According to Coinbase’s release, investors are frequently exposed to substantial operational and investment risks when using conventional techniques to generate Bitcoin income.

In order to combat this, CBYF will use a cash-and-carry arbitrage technique, which involves capturing price differences between the futures and spot markets for Bitcoin.

The fund will notably steer clear of high-risk activities such as systematic options selling and unsecured bitcoin lending.

What investors must know about Coinbase’s Bitcoin Yield Fund (CBYF)

Fillings stated that returns will be made in bitcoin, while Coinbase pointed out that third-party custodians will be used to reduce counterparty risks and protect client holdings.

Institutions looking for safer ways to produce yield without compromising security or regulatory standards will find the strategy appealing.

Due to Coinbase’s emphasis on meeting global demand for compliant bitcoin yield products, the Bitcoin Yield Fund is only accessible to institutional investors that are not based in the United States.

Aspen Digital, an Abu Dhabi-regulated wealth management platform, has already contributed to the fund’s seeding and will serve as CBYF’s first exclusive distributor in Asia and the United Arab Emirates.

Long-term holders have been looking for ways to earn returns on their investments in bitcoin in a sustainable and legal manner. Elliot Andrews, CEO of Aspen Digital, stated, “We are thrilled to introduce this product to the private wealth market because Coinbase is the most reliable counterparty in the asset class and because investors have a strong demand for Bitcoin yield.”

Looking ahead: Coinbase set to expand dominance into Bitcoin yield market

The introduction of the Coinbase Bitcoin Yield Fund comes after US stock market volatility and an increase in demand for non-cyclical assets.

According to DeFiLlama, the total value locked in Bitcoin DeFi increased from $3.7 billion on April 17 to $5.9 billion at the time of writing, indicating that the protocols have seen significant customer interest in recent years.

While Bitcoin DeFi protocols such as Babylon and Lombard financing have mostly served retail investors, Coinbase’s CBYF now offers a compliant product offering that addresses institutional demand.

Given the increasing demand from government organizations and corporate investors for structured cryptocurrency investment vehicles, Coinbase seems poised to expand its market leadership beyond trading and custody to include yield-generation services for international organizations.