Kraken Institutional Supports Lombard's Bitcoin Yield Strategy
Bitcoin is becoming productive collateral for institutional investors.
1Shift in Bitcoin Yield Strategy
Lombard is transitioning LBTC's yield source from Bitcoin staking to an institutional covered-call strategy managed by Bitwise Asset Management. This strategy targets a net 2.5% APY in Bitcoin terms. Kraken Institutional provides qualified custody for the strategy and holds Bitcoin in segregated, bankruptcy-remote accounts. This ensures a secure infrastructure for institutional investors.
2Bitcoin as Productive Collateral
Institutional investors are evaluating platforms not just for trading but also for what their assets can do while held. Bitcoin is evolving from a passive store of value into productive collateral. This shift requires integrated custody, execution, and yield services.
3Kraken's Role
Kraken Institutional is supporting Lombard's transition. Bitcoin backing the strategy is held in qualified custodians, including Kraken, under tri-party agreements ensuring Bitcoin remains in qualified custody. Kraken also serves as one of the execution venues for the strategy's options trading.
4Collaboration with Bitwise
Bitwise Asset Management manages Lombard's covered-call strategy, enabling Bitcoin to be used as productive collateral. Kraken provides both custody and execution services in collaboration with Bitwise. This contributes to the development of institutional Bitcoin infrastructure.
5Infrastructure for Institutional Investors
Kraken Institutional is facilitating Lombard's transition, making Bitcoin's use as productive collateral more accessible. This offers a safer and more efficient infrastructure for institutional investors. Bitcoin's role as one of the largest assets in DeFi marks a significant step in this direction.
6Future Steps
Kraken Institutional aims to expand its services for institutional investors by strengthening its relationship with Lombard. Bitcoin's use as productive collateral is becoming a key trend in future investment strategies. This enhances the importance of Kraken's institutional offerings.
7Expectations of Institutional Investors
Institutional investors expect Bitcoin to be used as productive collateral. This requires integrated custody, execution, and yield services. Kraken Institutional supports Lombard's transition to meet these expectations and develop Bitcoin infrastructure.
8The Future of Bitcoin
Bitcoin's use as productive collateral is emerging as a key trend in future investment strategies. Kraken Institutional is taking significant steps in this area through its collaboration with Lombard. This makes Bitcoin more attractive to institutional investors.