Coinbase Asset Management is preparing to launch the Coinbase Bitcoin Yield Fund on May 1, offering non-U.S. institutional investors a new way to earn yield on their Bitcoin holdings.
As originally reported by Bloomberg, Coinbase Asset Management will launch a new investment product designed to generate yield on Bitcoin (BTC) holdings. The Coinbase Bitcoin Yield Fund will open on May 1, exclusively targeting non-U.S. institutional investors.
The strategy behind the fund is based on the practice called “basis trading”, which involves exploiting the price difference between BTC spot price and its perps price. When BTC price is rising, the gap between the spot price and the perp price can widen significantly, creating opportunities for profit. The fund seeks to deliver an annualized net return between 4% and 8%, with yields paid out in BTC. However, Coinbase cautioned that actual returns could vary.
Although basis trading is considered a relatively low-risk strategy, there have been instances where excessive leverage led to significant losses. Coinbase stated that the Bitcoin Yield Fund would employ only modest leverage and would prioritize security by storing assets with Coinbase and “other qualified custodians.”
Sebastian Bea, President of Coinbase Asset Management, said that this fund aims to provide institutions with more reliable and compliant investment vehicles for digital assets, stating:
“We believe the Bitcoin Yield Fund is particularly well suited to the task, given its conservative and compliant investment strategy.”
The fund has already attracted early support from firms like Aspen Digital, a wealth management platform based in Abu Dhabi.
Coinbase’s move comes amid growing demand for institutional-grade Bitcoin yield products, with several new initiatives launched recently to offer returns on BTC holdings while ensuring secure custody and regulatory compliance.
Earlier this year, The Core Foundation in partnership with Maple Finance, BitGo, Copper, and Hex Trust launched lstBTC, which allows users to deposit BTC with custodians like BitGo or Copper and mint a liquid token that accumulates yield over time.
Similarly, Securitize Credit has recently collaborated with digital asset trading firm QCP to increase returns from BTC basis trades by using BlackRock’s USD Institutional Digital Liquidity Fund as collateral. By combining the basis trade strategy with the yield from the BUIDL fund, Securitize reported annualized returns exceeding 20%.
