CMC News

Coinbase To Launch $BTC Yield Fund for Institutions, Offering 4%-8% Returns

Coinbase will launch its Bitcoin Yield Fund on May 1, offering institutional investors outside the U.S. a chance to earn 4% to 8% annual returns on their Bitcoin holdings. The fund will use a cash-and-carry strategy, which takes advantage of the difference in price between spot Bitcoin and perpetual swap contracts, aiming to generate passive income. The fund is backed by investors like Aspen Digital, a wealth manager in Abu Dhabi, and will help fill the gap left by $BTC , which doesn't offer passive income through staking like $ETH or $SOL .

The launch comes as Bitcoin has seen a 9% price increase in the week leading up to April 28, driven by institutional interest, especially from ETFs, which recorded over $3 billion in inflows. Ryan Lee from Bitget Research mentioned that the rise in Bitcoin’s price is largely due to corporate buying, and if Bitcoin breaks the $100,000 mark, retail interest could follow.

The fund’s approach is designed to minimize risks for investors, offering a more conservative strategy compared to other high-risk Bitcoin yield products. Coinbase aims to keep the underlying Bitcoin secure through its platform and qualified custodians. While the fund targets returns of over 4%, Coinbase warns that actual performance may vary, emphasizing that it’s a safer option compared to competing products that take on more investment and operational risk.