Binance Offers Yield To Bitcoin Owners
Binance Offers Yield To Bitcoin Owners.
The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Binance has introduced a new product that offers yield to owners of Bitcoin (CRYPTO: $BTC).
Holders of BTC looking to earn yield on their investment without selling any of it can maximize their returns through Binance's new "BTC Yield" product.
BTC Yield is designed for people who already own Bitcoin in a digital wallet.
Eightco Secures $125 Million Investment From Bitmine And ARK Invest, Shares Surge
Stanley Druckenmiller Says Stablecoins Could Reshape Global Finance
Users deposit their Bitcoin into BTC Yield and receive an internal position called "BTCY." Binance holds the deposited Bitcoin as collateral while systematically selling BTC call options.
The call option seller, or writer, gets compensated with a premium. Binance collects those premiums and shares them with participants.
Basically, Binance is running a "covered-call strategy" on users' Bitcoin holdings. It's a strategy that is common in traditional finance and among traders, though it usually involves stocks.
In Binance's case, its BTC Yield product generates returns in two ways. First, a portion of the collected premiums is converted to Bitcoin and distributed to users' accounts each Friday.
Second, the remaining premiums stay inside the strategy and gradually increase the value of each BTCY unit. As the retained premiums accumulate, each unit slowly represents more BTC.
Other, more traditional financial institutions are also offering yield on Bitcoin holdings, including asset manager BlackRock (NYSE: $BLK).
BlackRock recently introduced a Bitcoin income exchange-traded fund (ETF) that uses a covered-call strategy to generate returns for holders.
In terms of fees, Binance takes a 15% share of gross premiums before calculating user yield, and redemption fees apply when exiting the product.
The product also offers no principal protection and weekly distributions are not guaranteed and could be zero.
Binance is privately held and its stock does not trade on a public exchange. Bitcoin is trading at $63,250 U.S. on July 7.
Sinergia Empresarial continuará el seguimiento de esta información sobre binance Offers Yield To Bitcoin Owners y ampliará la cobertura conforme se confirmen nuevos elementos relevantes para el ecosistema empresarial.
