Coinbase Asset Management to Launch Institutional Fund with Bitcoin Yield Opportunities

Key Takeaway:

• Coinbase launches a new Bitcoin Yield Fund for non-US institutional investors.
• The fund uses “basis trading” to deliver a 4–8% annual yield paid in bitcoin.
• Investors can convert Bitcoin to shares monthly and redeem shares back to Bitcoin upon exit.

Coinbase Asset Management (Coinbase AM) will roll out the Coinbase Bitcoin Yield Fund (Coinbase BYF) on May 1, according to Bloomberg. The fund gives non-US institutional investors a way to earn between 4% and 8% annual returns on idle Bitcoin reserves. Yields are paid in Bitcoin.

While the 4% return is a target, Coinbase clarifies it is not guaranteed.

A New Way to Earn Yield on Bitcoin

The approach to Coinbase’s BYF is a classic cash-and-carry practice called “basis trading.” Managers buy spot Bitcoin, short an equal value of perpetual-swap futures, and pocket the funding spread that widens when bullish traders overpay to keep leveraged long positions open. 

If Bitcoin prices slide, this structure could generate the highest returns in rising markets and may deliver thinner or even negative spreads.

JUST IN: Coinbase to Launch Institutional Fund Offering Yield on Bitcoin – Bloomberg

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— Bitcoin Archive (@BTC_Archive) April 28, 2025

To avoid risks seen in past market crashes, Coinbase will use modest leverage to enhance returns without overexposing investors. 

Additionally, each month, investors can swap Bitcoin for shares, and after exiting, they can redeem the shares back into Bitcoin.

The product will give Bitcoin a native yield similar to blockchain staking rewards available on networks such as Ethereum and Solana, potentially broadening demand among treasury managers who have treated BTC strictly as a buy-and-hold asset until now.

Coinbase Asset Management president Sebastian Bea added that institutions “need better, conservative products to enter the next digital-asset cycle.” 

Aspen Digital, an Abu Dhabi private-wealth platform,  joined other seed investors in the fund and will distribute the product across the Middle East and Asia. 

Aspen CEO Elliot Andrews praised the Coinbase AM endeavor, noting that many institutions seek Bitcoin yield without the operational complexities of perpetual-swap desks.

With this launch, Coinbase enters a crowded offshore market, where hedge funds already harvest basis spreads. 

The exchange is betting that brand reputation, on-exchange liquidity, and institutional-grade custody will steer low-risk capital toward its own wrapper.

Traditional Finance Institutions and Exchange Partnerships Fueling Crypto Boom

Crypto exchanges are actively partnering with traditional finance institutions as institutional and public interest in Bitcoin and other cryptocurrencies grows. 

This collaboration drives increased liquidity in the industry, increasing the stock price for these exchanges.

In March, a report by Bernstein analyst Gautam Chhugani set a price target of over $310 for Coinbase stock, predicting a 71.2% rise from its price of $181.14. This outlook is built on the increased crypto adoption, positive market sentiment, and regulatory shifts, including the SEC’s dismissal of its case against Coinbase and new national policies. 

The addition of other services, such as the successful Coinbase One subscription, has also contributed to strong financial growth.

Other high-profile partnerships between traditional finance and exchanges include Cantor Fitzgerald’s $3 billion agreement with Bitfinex, Softbank, and Tether in creating a Bitcoin SPAC.

Such collaborations signal strong instittuional interests in crypto and could accelerate adoption within the crypto industry.