Coinbase Unveils Yield-Bearing Bitcoin Fund, Promising Up to 8% Returns

This move represents a significant step by Coinbase to broaden its suite of institutional investment products, particularly in jurisdictions with clear regulatory frameworks for digital assets. The fund is not available to U.S. investors due to ongoing regulatory constraints, but it signals the exchange’s growing ambition to serve the global demand for institutional-grade crypto products.

Unlike proof-of-stake cryptocurrencies like Ethereum, Solana, or Avalanche, Bitcoin does not offer a native staking mechanism to earn passive rewards. For years, institutional holders have been challenged by the lack of reliable, compliant tools to generate yield on Bitcoin positions without incurring outsized risks.

Coinbase’s CBYF aims to solve this by using a strategy known as basis trading, a well-established arbitrage approach that exploits price differences between the spot and futures markets. Specifically, the fund will short Bitcoin futures while holding long positions in spot Bitcoin, capturing the premium futures often traded during bull markets.

As the fund matures, Coinbase says it plans to expand its strategy set, introducing lending, covered calls, and other options-based mechanisms to optimize returns. The fund’s active management structure allows it to adapt to changing market conditions while remaining within institutional risk tolerances.

The CBYF is registered and operated outside the U.S., a strategic choice driven by the more favorable regulatory climate in jurisdictions such as the United Arab Emirates, Hong Kong, and Switzerland.

Among the first backers of the fund is Aspen Digital, a Hong Kong and Abu Dhabi-based digital asset manager that has received regulatory approval from the Financial Services Regulatory Authority (FSRA) in Abu Dhabi Global Market (ADGM). Aspen Digital has already committed to onboard institutional clients into CBYF, underscoring its confidence in Coinbase’s approach.

The launch of CBYF is part of a broader institutional pivot by Coinbase, which is increasingly positioning itself as the premier gateway for regulated digital asset exposure. In recent quarters, Coinbase has rolled out a number of services tailored to banks, hedge funds, and asset managers, including Coinbase Prime, a full-suite institutional trading platform.

A recent report from EY-Parthenon and Coinbase found that 83% of global institutional investors plan to increase their allocation to crypto assets in 2025, citing diversification and yield opportunities as primary drivers. The report emphasized that yield-bearing products, especially on Bitcoin, are among the most requested offerings.

Coinbase also benefits from growing interest in Bitcoin ETFs, which have attracted billions in flows since being approved in the U.S. earlier this year. Over $3 billion flowed into Bitcoin ETFs in just the past week, lifting BTC prices by more than 9% and sending a clear signal that institutional demand for exposure to Bitcoin is heating up again.

Indeed, the CBYF rollout comes just weeks after BlackRock and Fidelity launched tokenized treasury funds overseas, and amid growing calls for the SEC to approve regulated staking ETFs.

With more than $100 billion in institutional Bitcoin holdings globally, the introduction of a yield-bearing vehicle by a regulated U.S.-listed company like Coinbase could significantly shift the competitive landscape.

Other firms including Babylon, Matrixport, and Anchorage Digital have hinted at launching similar products, but Coinbase’s strong brand and regulatory stature give it a first-mover advantage.

As markets increasingly demand both yield and compliance, products like CBYF may set the new benchmark for institutional Bitcoin investment in the years to come.