Coinbase Major Move in May 2025

Coinbase Asset Management (CBAM) is launching the Coinbase Bitcoin Yield Fund (CBYF) on May 1, 2025, to address the increasing institutional demand for Bitcoin yield. Below are the highlights;

Objective: The fund aims for a 4-8% net annual return in Bitcoin over a market cycle.
Target Investors: The fund is specifically designed for institutional investors. Initially, it will be available for international (non-US) investors.
Strategy: The fund employs a conservative strategy, focusing on lowering investment and operational risks typically associated with Bitcoin yield products. It will utilize third-party custody integrations for trading, which Coinbase believes will significantly reduce counterparty risk. The strategy will avoid riskier high-interest Bitcoin loans and systematic call selling. The yield will be generated through a cash-and-carry arbitrage strategy, capitalizing on the price differences between spot and derivatives markets for Bitcoin.
Subscription and Redemption: The fund will have monthly open periods for subscriptions and redemptions, with a five-business-day notice period.
Estimated Capacity: The estimated strategy capacity is $1 billion in Assets Under Management (AUM).
Custody: The fund will use qualified custodians.
Seeding Partner: Aspen Digital, a digital asset manager regulated by the FSRA based in Abu Dhabi, UAE, is among the initial investors and will serve as the exclusive wealth distribution partner across the UAE and Asia.
Rationale: Unlike staked digital assets like Ether and Solana, Bitcoin does not natively generate yield. This fund aims to fill this gap for institutional allocators while mitigating the risks often involved in other Bitcoin yield-generating strategies.
Coinbase Asset Management: CBAM is a dedicated digital asset manager catering to institutional investors, offering alternative investment strategies. It is a SEC-registered RIA, CFTC-registered CPO and CTA, and a member of the NFA. Its Cayman entity, CBAM (Cayman) Ltd. SECZ, holds a CIMA asset management license.

This launch signifies Coinbase’s continued efforts to expand its offerings for institutional clients, providing them with more avenues to engage with digital assets.