Coinbase to Launch Income-Based Bitcoin (BTC) Fund for Institutions
Blockchain editor
Coinbase, the world’s third-largest cryptocurrency exchange by trading volume, will launch the Coinbase Bitcoin Yield Fund on May 1, aiming to provide bitcoin exposure to institutional investors outside the United States.
According to a blog post published by Coinbase on April 28, the fund aims to generate an annualized net return of 4% to 8% on bitcoin holdings.
“In response to growing institutional demand for bitcoin yield, Coinbase Asset Management is pleased to launch the Coinbase Bitcoin Yield Fund (CBYF),” Coinbase wrote in the announcement.
The fund is backed by multiple investors, including Aspen Digital, an Abu Dhabi-based digital asset manager regulated by the Financial Services Regulatory Authority (FSRA).
The fund will generate income through a cash-and-carry strategy, which is to exploit the spread between the spot bitcoin price and the price of derivatives.
Unlike Ethereum (ETH) and Solana (SOL), Bitcoin holders cannot earn passive income through staking - and the fund is designed to fill this gap, with the announcement stating: "Bitcoin income funds have emerged in response to this limitation, but these funds generally require institutional allocators to bear greater investment and operational risks."
The new fund aims to reduce the investment and operational risks typically faced by Bitcoin income products, which Coinbase said will better match the risk appetite of institutional investors.
Bitcoin momentum driven mainly by institutional interest
Coinbase said the reason for the launch of the fund is the growing institutional adoption of cryptocurrencies, which may also be one of the reasons for the sharp recovery in Bitcoin prices over the past week.
According to Farside Investors, Bitcoin rose more than 9% in the week ending April 28, benefiting from ETF inflows, which net inflows exceeded $3 billion that week, setting a record high.
Bitget Research Chief Analyst Ryan Lee said in an interview that Bitcoin's recovery to $94,000 mainly benefited from "ETF inflows and corporate purchases", while retail investor interest still lagged.
He added: "If Bitcoin breaks through $100,000, retail investor interest may surge, driven by media hype and FOMO (fear of missing out). The resistance level in the $94,000-95,000 range can be watched to see if retail funds re-enter the market."
On April 21, BitMEX co-founder Arthur Hayes predicted that this may be the last chance to buy Bitcoin at a price below $100,000, as the upcoming U.S. Treasury repurchase operation may become an important catalyst for the next round of sharp rise in Bitcoin prices.
