Lombard Shifts LBTC Yield Strategy, Targets 2.5% APY in Bitcoin

Lombard has made a significant change to its LBTC yield strategy. The financial institution is moving from Babylon Bitcoin staking to a covered-call options strategy managed by Bitwise, aiming for a 2.5% net annual percentage yield (APY) in Bitcoin for LBTC holders.

The new approach will deploy up to 60% of LBTC's backing, with Bitcoin custody managed by Anchorage Digital Bank and Kraken Institutional. A $10 million pilot program is set to commence during the week of August 17, followed by full allocation expected in September.

Lombard's decision represents a proactive shift towards enhancing yield stability amidst the crypto market's mixed signals. The strategy may appeal to existing and prospective holders, potentially increasing engagement with LBTC.