Institutions Find Ways to Earn Yield on Bitcoin Through Various Strategies

Institutions can earn a yield on Bitcoin through various strategies, including lending, futures, options, and on-chain methods. According to research by Glassnode in collaboration with Xapo Bank, these routes offer different returns for varying levels of risk.

The futures carry is one such method, where leveraged longs pay a premium to keep their positions open. However, this strategy has only beaten the yield on a short-dated Treasury when the market was hot, and its peaks came during momentum phases.

Another way to earn a yield is through the options premium, which is paid for by the seller of an option due to expected volatility. This premium has been collected by institutions through a covered call strategy, selling a call option against Bitcoin already held.