- Bitcoin institutional adoption is accelerating, with companies like Strategy and Metaplanet leading the charge.
- Coinbase is launching the Bitcoin Yield Fund (CBYF) to offer institutional investors yield through basis trading.
- CBYF is designed to generate returns without relying on BTC price appreciation, using futures contracts for a safer yield strategy.
What is one thing we can take away from the crypto market over the last year? If we had to pick one thing, that would be the fact that Bitcoin institutional adoption is definitely on the rise.
Companies like Strategy (formerly MicroStrategy) and Metaplanet have revolutionized the way firms look at Bitcoin as an asset. While a couple of years back, digital assets were seen as “too volatile” for a company to hold—actors like Michael Saylor kind of derailed that train of thought.
With that notion in mind, Coinbase is ready to launch a new Bitcoin Yield Fund (CBYF) designed for institutional investors outside of the United States.
How Does It Work?
Unlike staked digital assets like Ethereum and Solana, Bitcoin does not inherently generate yield. The new Coinbase Bitcoin Yield Fund aims to tackle this by employing basis trading—an arbitrage strategy where the fund takes advantage of the price difference between Bitcoin’s spot market and futures contracts to generate returns in BTC.
CBYF Basis Trading Explained:
- CBYF buys Bitcoin at the current spot price.
- At the same time, it sells a Bitcoin futures contract at a slightly higher price.
- The difference (spread) between the spot price and futures price becomes its yield.
- When the futures contract expires, the fund collects the premium, generating returns without needing Bitcoin’s price to go up.
Coinbase considers the CBYF a lot safer than previous Bitcoin yield funds. Unlike similar funds in the market that rely on lending or systematic call selling (which involves selling Bitcoin options for yield but carries downside risk), Coinbase’s basis trading strategy is seen as less risky than its competitors.
The exchange affirms that—while absolutely not a guarantee—investors taking into the CBYF subscription model can expect 4% to 8% yields over a year. CBYF is seeded by Aspen Digital, a regulated Abu Dhabi-based digital asset manager, further reinforcing credibility.
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