Coinbase is launching a new institutional fund that will provide yield on Bitcoin holdings for non-US investors. The Coinbase Bitcoin Yield Fund (CBYF) aims to offer annual returns of 4% to 8% and will be available starting May 1. The fund is designed to address the growing demand from institutional investors for Bitcoin yield products.
It will generate returns through a cash-and-carry strategy that takes advantage of the price difference between spot Bitcoin and Bitcoin derivatives. Unlike other cryptocurrencies such as Ethereum and Solana, Bitcoin holders typically cannot earn passive income through staking. The CBYF seeks to fill this gap by offering a lower-risk option for institutional investors to generate yield on their Bitcoin holdings.
Coinbase Asset Management stated, “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 received support from multiple investors, including Aspen Digital, a digital asset manager based in Abu Dhabi and regulated by the Financial Services Regulatory Authority.
Institutional Bitcoin yield opportunity
This launch comes at a time when institutional interest in cryptocurrency is on the rise.
Bitcoin has experienced a significant price recovery over the past week, gaining more than 9%. Exchange-traded fund (ETF) inflows have also been strong, recording their second-highest week of inflows at over $3 billion, according to data from Farside Investors. Michael Saylor, a prominent figure in the crypto community, has hinted at additional Bitcoin purchases as institutional interest continues to grow.
The recent price increases have been driven primarily by “ETF inflows and corporate buying,” despite lagging retail interest. BitMEX co-founder Arthur Hayes recently predicted that upcoming U.S. Treasury buybacks could serve as the next significant catalyst for Bitcoin’s price rise, potentially representing a “last chance” for institutional investors to enter the market. Coinbase’s new fund could provide a significant opportunity for institutional investors to benefit from their Bitcoin holdings while addressing a critical gap in the market.
As the cryptocurrency landscape continues to evolve, initiatives like the CBYF may help to further legitimize and stabilize the market.
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