The cryptocurrency investment firm and liquidity provider XBTO has partnered with Arab Bank Switzerland to offer a Bitcoin yield product for the bank's wealth management clients, reflecting the growing institutional demand for Bitcoin (BTC) yield products.
According to XBTO, the product will utilize its "diamond-hands" strategy, a proprietary method used by the company's Bitcoin yield fund. The fund's rule-based strategy includes selling BTC options to earn premiums while seeking to accumulate during market downturns. The product is regulated in Bermuda and reportedly offers an annualized return of about 5% with relatively low volatility.
Javier Rodriguez-Alarcon, Chief Investment Officer and Head of Digital Asset Management at XBTO, stated, "The maturation of institutional digital asset demand requires complex solutions that go beyond simple exposure."
Romain Braud, Head of Digital Assets at Arab Bank Switzerland, noted, "We are seeing a growing demand from wealth management clients to generate yield on their Bitcoin holdings within a properly managed risk framework."
For a long time, generating yield on Bitcoin was considered impossible, as most returns relied solely on price appreciation. However, new mechanisms such as derivatives and staking-based models now provide holders with alternative income sources.
Ryan Chow, CEO of Solv Protocol, recently stated at the Token2049 conference that institutional interest in Bitcoin yield products has grown exponentially in recent years, enabling institutions to generate yield without selling BTC.
According to OneSafe, while Bitcoin yield products may seem like tools for building income streams, they also carry risks. These risks include temporary losses, regulatory ambiguity, market volatility, and issues within smart contracts.
Some companies are also betting on Bitcoin yield products, including Hilbert Capital with its Bitcoin Yield Solution, Purpose Investments with its Purpose Bitcoin Yield ETF, and NEOS with its Bitcoin High Income ETF. Coinbase is also set to launch the Coinbase Bitcoin Yield Fund in April 2025.
Related: Nasdaq-listed Lion Group bets on Hyperliquid, announces a $600 million HYPE fund.
Original article: “XBTO and Arab Bank Switzerland Launch Bitcoin (BTC) Yield Product for Institutional Clients”
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