Coinbase is Making Bitcoin Yield Funds for Institutions – What Could Go Wrong?

So, Coinbase—yeah, the one that’s third in line for crypto exchanges—is launching something called the Coinbase Bitcoin Yield Fund on May 1. Because, you know, what every institution needs is another way to park their Bitcoin. This one’s designed to give those institutional investors outside the US a chance to dip their toes into the wild world of Bitcoin. How generous, right?

The fund promises an annual net return of 4% to 8%. I know, super exciting. I mean, it’s Bitcoin, not your grandma’s savings account, but sure, let’s pretend that’s a huge deal. According to their blog post, Coinbase says they’re doing this because “Bitcoin yield funds have emerged to address this limitation.” Limitation? Like the fact that you can’t just stake Bitcoin and get rich without doing anything? Yeah, sounds like a “limitation.” 🙄

And of course, they’ve got “investors.” Not just any investors though—Aspen Digital, this fancy digital asset manager from Abu Dhabi. They’re regulated by the Financial Services Regulatory Authority, because clearly, nothing says “trustworthy” like a financial regulator. 😆

How’s the yield gonna work? Well, apparently it’s a “cash-and-carry strategy,” which is fancy talk for, “We’re gonna mess around with the difference between spot Bitcoin prices and derivatives.” Yeah, that clears everything up. 📉📈

Look, unlike those other cryptos like Ether and Solana, Bitcoin’s just sitting there, waiting for someone to figure out how to make passive income from it. Coinbase claims they’re filling that gap, but let’s be real—this just sounds like a complicated way to say “here, take on some risk while we figure this out.” 🙃

“Bitcoin yield funds have emerged to address this limitation, but these funds generally require institutional allocators to take on significant investment and operational risk.”

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2025-04-28 15:33