The partnership is part of a broader trend of banks integrating structured BTC yield products into wealth management services.
XBTO, a crypto investment firm and liquidity provider, has partnered with Arab Bank Switzerland to provide a Bitcoin yield product to the bank’s wealth management clients, part of a growing appetite among institutions for BTC yield products.
According to XBTO, the product will apply its “diamond-hands” strategy, a proprietary approach used on the company’s Bitcoin (BTC) yield fund. The fund’s rules strategy involves selling BTC options to earn premiums, while seeking accumulation during market dips. Regulated in Bermuda, the product has reported annualized returns of around 5% with relatively low volatility.
“The maturation of institutional digital asset demand requires sophisticated solutions that go beyond simple exposure,” said Javier Rodriguez-Alarcon, chief investment officer and head of digital asset management at XBTO.
“We have seen growing demand from our wealth management clients for ways to generate yield on their Bitcoin holdings within a properly managed risk framework,” said Romain Braud, head of digital assets at Arab Bank Switzerland.
Generating yield on Bitcoin was long considered out of reach, as most returns relied on price appreciation alone. But newer mechanisms, such as derivatives and staking-based models, are now offering alternative sources of income for holders.
CEO of Solv Protocol Ryan Chow recently said at the Token2049 conference that interest from institutions in Bitcoin-yield products has risen exponentially in the past few years, allowing institutions to generate yield while not selling their BTC.
While Bitcoin yield products may seem like a tool to build an income stream, they also entail risks, according to OneSafe. These risks include impermanent loss, lack of regulatory clarity, market volatility, and problems within smart contracts.
