Coinbase Asset Management “focuses on providing investment solutions for digital assets for institutional customers” has stepped into the market by announcing the launch of a fund that promises Bitcoin (BTC) yields for institutional investors.
Coinbase Bitcoin Yield Fund will begin operation on May 1st. Capital acquisition and attempt to integrate Bitcoin’s appeal in a financial environment Continuous evolution.
Coinbase, the leading US cryptocurrency exchange, explained it The fund offers annual performance of 4% to 8%. It will be paid in Bitcoin.
This product is not available in the US. Participants can deposit Bitcoin to acquire funds from the fund and withdraw the underlying assetsaccording to the company’s official statement.
What strategy do you implement as the background?
Investors deposit Bitcoin in the hopes of obtaining annual yields through a conservative strategy designed by Coinbase Asset Management.
Although specific details of the strategy have not been revealed, the company emphasized that the fund is trying to generate stable returns.
Unlike other digital assets that provide returns through staking, CBYF offers an alternative way for Bitcoin holders to generate yields without relying on the network’s native mechanisms.
Why compare it to staking?
Coinbase compares this device with staking. This allows for the operation of some cryptocurrency networks and liquidity pools.
Staking is the process in which a particular cryptocurrency holder blocks assets within a network to support its operations, such as verifying transactions and maintaining security, as explained in the Cryptocurrency section, the Cryptocurrency Education section.
In return, they receive similar rewards as well as interest paid in the same currency. For example, in Ethereum Network, users staking on ETH contribute to process transactions and win ETH periodically.
This mechanism is typical of the networks used in stock proof of stock (participation test) and is not available on mining-dependent Bitcoin networks. In Bitcoin, miners use specialized equipment (ASICs) to perform intensive calculations, generating random numbers until they find one that meets the objectives of the protocol, allowing them to propose transaction blocks.
The network is approved, the blocks are added, the miners receive rewards in BTC, and the process begins again. This mechanism guarantees the network, reviews transactions, and provides rewards to participants.
Coinbase Bitcoin Yield Funds provide opportunities for institutional investors Generate yields in BTC through financial strategies without directly participating in mining.
A low-risk strategy with bitcoin
Sebastian Bea, president of Coinbase Asset Management, highlighted the relevance of the current market fund. “According to conservative investment strategies and standards, we believe that Bitcoin yield funds are particularly suitable for this task,” he said.
Coinbase designed CBYF Reduce investment and operational risks. This is an aspect consistent with institutional investors’ risk appetite, according to the company..
Unlike other Bitcoin Performance Funds that can carry significant risk, CBYF uses third party custody integration to operate, avoiding out-of-storage asset transfers; Don’t rely on Bitcoin loans with high interest or systematic purchase optionsminimises exposure to counterparts and investment risks.
To ensure safety, deposited BTC will be stored in Coinbase and other qualified custodians. But the company warned that, The goal is to achieve performance above 4%, but the actual results may vary depending on the market situation.
The Coinbase Bitcoin Yield Fund is backed by investors such as Aspen Digital, the father’s management platform based in Abu Dhabi.
The fund could attract important capital and encourage Bitcoin adoption among institutional investors. Combining yields with a controlled risk profile, Coinbase responds to the demand for tools to integrate cryptocurrency into traditional portfolios.
