Coinbase Asset Management is preparing to introduce a new investment product that will generate steady Bitcoin yields for non-U.S. institutional investors.
According to an official statement today, the Coinbase Bitcoin Yield Fund will debut on May 1. It is a long-bitcoin fund that seeks to deliver an annualized net return between 4% and 8%, payable in Bitcoin.
Unlike traditional blockchain staking used by cryptocurrencies such as Ethereum and Solana, this fund will use a trading strategy known as the cash-and-carry basis trade.
Strategic Approach to Yield Generation
In this method, traders exploit price discrepancies between spot Bitcoin and perpetual futures contracts, commonly called “perps”.
Notably, this price dislocation often provides greater opportunity when Bitcoin prices rise. However, Coinbase Asset Management acknowledged that yields might diminish or even turn negative during periods of declining Bitcoin prices.
Investors will participate in the fund by depositing Bitcoin and will retain the option to withdraw their underlying Bitcoin assets on a monthly basis. The fund will hold Bitcoin with Coinbase and other qualified custodians.
Coinbase has emphasized that while a 4% return target is set, actual results may vary significantly due to market conditions. Furthermore, the fund will employ only low leverage levels, distinguishing it from previous cases where excessive leverage in basis trades led to considerable losses.
Institutional Support and Risk Management Focus
The fund has already attracted backing from several investors, including Aspen Digital, an Abu Dhabi private wealth management platform. According to Coinbase Asset Management, institutional investors have shown interest in Bitcoin yield opportunities.
In line with this objective, the Bitcoin Yield Fund will prioritize safety by limiting operational and investment risks compared to competing products that may assume greater risk levels.
Meanwhile, Aspen Digital’s participation underscores the strategic importance of trusted custodianship and conservative fund structures for private wealth markets. Coinbase Asset Management noted that the cash-and-carry trade approach, although relatively low risk, has experienced notable failures in the past, mainly when firms relied heavily on leverage.
By focusing on a controlled leverage strategy, the fund intends to offer institutional investors a more stable environment for Bitcoin yield generation.
Outlook for Bitcoin Yield Opportunities
As the launch date approaches, Coinbase Asset Management maintains that developing structured investment products is critical for the next wave of institutional involvement in digital assets.
Sebastian Bea, President of Coinbase Asset Management, stated that the Bitcoin Yield Fund’s conservative and compliant framework positions it well for institutional demand.
However, the firm also cautioned investors that while the fund is designed to manage risk effectively, market conditions could still lead to performance variations.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
