Coinbase Asset Management deploys a new fund for institutions to receive a return on their Bitcoin (BTC) assets.
Opening of May 1 for non -American institutional investors, the Bitcoin Coinbase return fund aims to provide a net annualized return of 4% to 8%, according to a press release on Monday.
Among those who support the fund, Aspen Digital, based in Abu Dhabi, said that the return will initially be generated by basic trading, with loan and option strategies to use in the future.
The so-called Bitcoin basic trade involves capitalizing on the propagation between future and cash markets. It became popular at the end of 2024 while the hedge funds marked a record summit of $ 14.2 billion in short positions from the BTC, while simultaneously purchasing Spot Bitcoin ETF shares.
The strategy produces yields according to the spread between the two markets, but is not immune to risks. For example, if an entity was short of $ 1 billion on a BTC long -term product and the price of the BTC was to go wildly, this entity should continue to add margin to avoid liquidation.
In addition, as trade becomes more congested, spread and subsequent yield could become very thin. This has already led to a number of hedge funds leaving trade at the start of this year, the figure runs on Chicago Mercantile Exchange is now 8.4 billion dollars, compared to $ 14.2 billion four months earlier.
The new Coinbase product arouses memories of the performance platform of the former cryptographic lender Blockfi, which opened its doors in 2019, but finally failed alongside the prices that crash in 2022.
The Blockfi fund, however, differs from the last Coinbase product in that it generated its performance thanks to loans, rather than a basic trade at risk.
