Coinbase Asset Management is launching a new investment product that will help institutional investors earn passive income from Bitcoin.
Coinbase Bitcoin Yield Fund (CBYF) was published on May 1, 2025, and will pay 4% to 8% annual net profit on Bitcoin.
This product is only available to institutional investors outside the US. Investors subscribe and redeem each month by depositing and withdrawing Bitcoin.
Unlike some altcoins, where holders can earn passive income through staking, Bitcoin does not have a native yield generation mechanism.
As Coinbase wrote in his blog post:
“While Bitcoin yield funds are emerging to address this limitation, these funds generally require that an institutional arrangement take on significant investments and operational risks.”
To reduce these risks, Coinbase designed CBYF and designed it to follow a conservative investment strategy.
Instead of lending Bitcoin at high interest rates or engaging in dangerous trading tactics, the fund uses the “cash and hauling” strategy, a technique well known in both traditional and digital asset markets.
In this strategy, the fund takes advantage of the difference in the spot market price of Bitcoin and the price of permanent futures contracts (PERPs), which are futures that do not expire.
If the market is bullish, these price gaps could expand and provide consistent returns.
said Sebastian Bea, president of Coinbase Asset Management. “Coinbase AM believes that the next cycle requires better products to allow institutional investments in digital assets.”
He added, “We believe that Bitcoin yield funds are particularly suitable for the task given their conservative and compliant investment strategies.”
Coinbase is taking extra precautions. The fund does not move Bitcoin out of storage and instead uses third-party custody integration for transactions.
According to Coinbase, this approach “reduces the risks on the other side significantly.”
Furthermore, CBYF does not implement a systematic call seller strategy with high profit Bitcoin loans that have previously led to losses on other funds.
Coinbase said it may use a small amount of leverage, but will be kept low to maintain a safer risk profile.
Analysis on the chain showed that Bitcoin transfers increased to exchanges after the announcement. This could mean that the institution is positioning itself to invest in new funds.
Meanwhile, Bitcoin is still above $90,000 in late April, with analysts looking at the $94,000-$95,000 resistance zone for potential breakouts to the highest ever high.
said Ryan Lee, chief analyst at Bitget Research. “If media hype and FOMO-fueled Bitcoin break $100,000, retail profits could skyrocket.”
Coinbase Asset Management says it has adjusted CBYF to meet fiduciary standards and institutional risk appetites.
Coinbase Asset Management combines traditional investment expertise with digital assets to provide solutions that help institutional investors enter the Bitcoin space.
