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Coinbase, the world’s third-largest cryptocurrency exchange by volume, announced the launch of the Coinbase Bitcoin Yield Fund on May 1. According to an April 28 blog post, the fund aims to deliver an annual net return of 4%-8% on Bitcoin (BTC) holdings for institutional investors.
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Coinbase Asset Management stated that the new fund addresses the growing demand from institutions seeking Bitcoin yields. Backed by several major investors including Aspen Digital, a digital asset manager regulated by the Financial Services Regulatory Authority in Abu Dhabi, the fund promises solid support.
Enabling Passive Income on Bitcoin
The fund’s yield will be generated through a “cash-and-carry” strategy that capitalizes on the price differences between spot Bitcoin and derivatives. Unlike Ethereum (ETH) and Solana (SOL) holders who can earn passive income via staking, Bitcoin holders have historically lacked such opportunities — a gap this fund aims to bridge.
“Bitcoin yield funds have emerged to address this limitation, but typically require institutional investors to take on significant investment and operational risk,” Coinbase said in the announcement.
Lower Risk, Wider Access for Institutions
The Coinbase Bitcoin Yield Fund aims to lower the investment and operational risks commonly associated with Bitcoin yield products, aligning more closely with institutional investors’ risk appetites. This move could open up new passive income opportunities through Bitcoin for a wider group of institutional clients.
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