Coinbase to Launch Bitcoin Yield Fund for Global Institutional Clients

Highlights:

• Coinbase Bitcoin Yield Fund offers 4%-8% net returns annually to non-US institutional investors.
• Assets remain secured with third-party custody integrations for safer trading.
• The fund targets up to $1 billion in assets with a conservative, compliant investment strategy.

Coinbase Asset Management will launch the Coinbase Bitcoin Yield Fund (CBYF) for institutional clients only starting from May 1, 2025. The Bitcoin Yield Fund serves the need of increasing institutional interest in investing in Bitcoin, especially those seeking steady returns. It provides a conservative annual return ranging between 4 and 8% paid in BTC and mainly targets investors across the world, excluding the US.

Notably, Coinbase knowingly created this Bitcoin Yield Fund to target the institutional investors’ risk tolerance. This is because, unlike Ethereum or Solana, for example, Bitcoin does not natively provide returns through staking, which leaves a void in investment products. Therefore, Coinbase decided to create the fund as a way of providing regular and continuous Bitcoin revenue without engaging in speculative lending or high-risk trading techniques.

The Bitcoin Yield Fund mainly relies on the cash-and-carry valuation approach. This strategy means utilizing differences between Bitcoin’s spot prices and financial derivatives called perpetual swaps. The price differential in these financial instruments is wide during an upward price movement, which may present a good opportunity for gain. On the other hand, yields may decline or go negative during the bear runs of the market phases.

JUST IN: Coinbase to launch a new fund to offer yield on #Bitcoin pic.twitter.com/8Za9rzJQos

— Bitcoin Magazine (@BitcoinMagazine) April 28, 2025

Risk Management and Security Measures

Additionally, Coinbase is focused on providing differentiation of the Bitcoin Yield Fund through proper risk management. Through such a type of custody integration, the company mitigates counterparty risks and ensures the assets are stored securely in cold wallets. The fund will keep Bitcoin assets in storage unless removal is necessary to protect investors and maintain stability.

Apart from the secure storage, Coinbase also made it clear that the Bitcoin Yield Fund does not engage in high-risk activities. Specifically, it avoids carrying out aggressive Bitcoin loans or employing systematic call-selling strategies. Such factors coincide with institutional investors’ mentality, which is highly risk-averse. This makes the fund more attractive to traditional financial institutions, making it attractive for funding from such organizations.

In addition to security measures, the structure of the Bitcoin Yield Fund also provides clear guidelines for operation. Investors may subscribe to or redeem the investments on a monthly basis by providing five business days’ notice. The above estimates place the fund at a capacity level of $1 billion in AUM, which depicts its large scale and clear high growth potential.

Strategic Partnerships and Market Positioning

Most importantly, the fund has received massive support from other significant institutions, such as Aspen Digital. Aspen Digital, which is regulated by the Financial Services Regulatory Authority (FSRA) and based in Abu Dhabi, has invested in the Bitcoin Yield Fund. It is also the exclusive distribution partner for the fund in Asia and the UAE, testifying to its credibility and international reach.

The expansion is timely, especially when there is growing interest from accredited investors in investing in crypto investments globally. The fund directly addresses the need for reliable Bitcoin returns, traditionally limited compared to other digital assets capable of staking.