Coinbase Launches Bitcoin Yield Fund to Meet Institutional Demand
In response to the growing demand for “passive income from Bitcoin” among institutional investors, the renowned exchange Coinbase announced the launch of the Coinbase Bitcoin Yield Fund (CBYF) on May 1st, with an expected annual return of 4% to 8%. The fund primarily generates returns through cash-and-carry arbitrage operations, providing a new income stream for Bitcoin holders who are unable to stake their assets. This development also reflects the recent increase in Bitcoin prices, alongside a continuous influx of institutional funds into the market.
Coinbase Bitcoin Yield Fund Set to Launch on May 1st
On April 28, Coinbase announced the upcoming launch of the Bitcoin Yield Fund, named the “Coinbase Bitcoin Yield Fund,” which is expected to officially open on May 1st. This fund primarily targets institutional investors outside the United States, assisting them in generating “passive income” from their Bitcoin holdings, with an annual target return set between 4% and 8%.
Coinbase stated that this initiative is a response to the rapidly increasing demand for “Bitcoin yield” in the market, and it will be managed and operated by its asset management division (Coinbase Asset Management).
How Are Returns Generated? Through “Cash-and-Carry Arbitrage”
This fund does not rely on traditional “staking” to generate income; instead, it employs a “cash-and-carry strategy.” In simple terms, this involves exploiting the price differences between spot Bitcoin prices and futures contract prices to conduct low-risk arbitrage operations, thereby steadily earning profit from the price spread.
Coinbase also noted that, unlike Ethereum (ETH) or Solana (SOL), Bitcoin does not have an inherent staking reward mechanism, making such yield-generating products fill a market gap.
Reducing Investment and Operational Risks to Attract More Institutional Funds
Coinbase emphasized that while there have been sporadic Bitcoin yield products in the past, many required investors to assume higher investment and operational risks, which are not suitable for large-scale institutional involvement.
The design of the CBYF fund aims to mitigate these risks, making it more aligned with the needs of large institutions seeking “stable returns with low volatility.”
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Risk Warning
Investing in cryptocurrencies entails high risks, and their prices may fluctuate dramatically, potentially resulting in a total loss of principal. Please assess the risks cautiously.