Coinbase Asset Management has announced the launch of a new fund aimed at generating yield on Bitcoin investments for institutional clients. This move signals the growing maturity of the crypto market.
What is the Coinbase Bitcoin Yield Fund?
Set to launch on May 1, the Coinbase Bitcoin Yield Fund is tailored for non-U.S. institutional investors, with a goal of delivering annualized returns ranging from 4% to 8% in Bitcoin, making asset holding more productive.
How Does the Bitcoin Yield Strategy Work?
The fund's strategy is based on a 'basis trade', exploiting price differences between the spot market and futures market. Investors simultaneously buy Bitcoin in the spot market and sell corresponding Bitcoin through perpetual swaps, profiting from price differences and funding payments.
The Importance of Investment Strategies for Institutions
Institutions are seeking ways to enhance yield on their assets amid low interest rates. Coinbase offers a structured product that facilitates their access to cryptocurrency investments.
The launch of the Coinbase Bitcoin Yield Fund marks a significant development, presenting earning opportunities on Bitcoin for institutional investors. While the potential yields are attractive, it remains crucial to consider associated risks.
