Coinbase eyes 4-8% annualized BTC returns via bitcoin yield fund
Quick Take
- Coinbase plans to tap $1 trillion in bitcoin liquidity to provide returns for investors.
- The fund is exclusively available to non-U.S. institutional investors and will pay participants in BTC.
Coinbase Asset Management is launching a new institutional fund designed to generate sustainable bitcoin-denominated returns for international institutional clients outside the United States.
Dubbed the “Coinbase Bitcoin Yield Fund” (CBYF), and scheduled to debut on May 1, the new product intends to expand BTC’s value proposition beyond just holding the asset, according to a Monday press release.
Unlike crypto assets such as ether or solana, which offer native staking rewards, bitcoin lacks built-in yield mechanisms. Coinbase argued that attempts to generate bitcoin yield often carry "significant investment and operational risks."
To address this, CBYF will employ a conservative trading strategy based on cash-and-carry arbitrage, which profits from price differences between Bitcoin's spot and derivatives markets. Coinbase added that the fund will avoid riskier strategies, such as high-interest bitcoin loans and systematic call selling, while third-party custodians will be used to mitigate counterparty risk. The CBYF targets annual net returns of 4% to 8%, paid in bitcoin.
Several investors have already seeded the fund, including Abu Dhabi-regulated Aspen Digital. Furthermore, Asper Digital was announced as CBYF’s initial exclusive distribution partner for investors in the United Arab Emirates and Asia.
“Long-term holders have been searching for ways to generate bitcoin-denominated returns on their assets in a sustainable and compliant way,” Elliot Andrews, CEO of Aspen Digital, remarked in a statement.
"Coinbase is the most trusted counterparty in the asset class, and combined with a huge amount of investor demand for Bitcoin yield, we are looking forward to bringing this product to the private wealth market."
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