Coinbase to launch yield-bearing Bitcoin fund for institutions

Coinbase, the world’s third-largest cryptocurrency exchange by volume, is launching the Coinbase Bitcoin Yield Fund on May 1, aiming to offer Bitcoin (BTC) exposure for institutional investors outside the US.

The fund targets an annual net return of 4% to 8% on Bitcoin holdings, according to an April 28 blog post by Coinbase.

“To address the growing institutional demand for bitcoin yield, Coinbase Asset Management is excited to introduce the Coinbase Bitcoin Yield Fund (CBYF),” the company wrote.

The fund is backed by multiple investors, including Aspen Digital, a digital asset manager based in Abu Dhabi and regulated by the Financial Services Regulatory Authority.

*Coinbase introduces Bitcoin yield-bearing fund. Source: Coinbase*

The yield will be generated through a cash-and-carry strategy, through the difference between spot Bitcoin prices and derivatives.

Unlike Ether (ETH) and Solana (SOL), Bitcoin holders can’t generate passive income through staking — a gap the fund is aiming to fill, according to the announcement:

“Bitcoin yield funds have emerged to address this limitation, but these funds generally require institutional allocators to take on significant investment and operational risk.”

The new fund seeks to lower the investment and operational risks typically associated with Bitcoin yield products, which Coinbase says will better align with the risk appetite of institutional investors.