Coinbase Launches Bitcoin Yield Fund Aiming for 4%-8% Returns for Institutions
Coinbase has introduced a new Bitcoin yield fund with an expected annual return range of 4% to 8%, targeting institutional investors. The fund, set to launch on May 1, will initially utilize basis trading to generate yield, with plans to expand to include lending and options strategies in the future.
In partnership with Aspen Digital, a firm based in Abu Dhabi, Coinbase’s fund will cater to non-U.S. institutional investors. Basis trading, a strategy that profits from the price difference between Bitcoin’s spot and futures markets, will be the primary method for generating returns. The approach has grown in popularity since late 2024 and offers a relatively low-risk opportunity for investors looking to benefit from Bitcoin’s market fluctuations.
However, like any trading strategy, basis trading carries risks, especially in volatile markets. If Bitcoin’s price experiences a sharp movement, it could trigger margin calls for positions that have been taken in the futures market. Despite these risks, the potential for steady returns has made basis trading an appealing choice for institutional investors.
The launch of Coinbase’s Bitcoin yield fund marks a departure from the riskier, lending-based strategies seen with firms like BlockFi, which collapsed in 2022. Instead, Coinbase aims to provide a safer alternative for institutions looking to earn returns on Bitcoin, while avoiding the significant risks associated with lending.
As interest in Bitcoin from institutional investors continues to grow, Coinbase’s latest offering provides a more conservative and calculated way to profit from the cryptocurrency’s volatility.
