Binance launches BTC Yield for Bitcoin holders
6.6 Investments Binance launched BTC Yield, a covered call product for Bitcoin holders. Users deposit BTC, receive BTCY tokens, and earn a share of option premiums. Returns are not guaranteed and may be capped.
Binance has introduced BTC Yield, a new product designed for Bitcoin holders seeking to earn returns without selling their BTC. The product employs a covered call strategy: users deposit Bitcoin and receive BTCY tokens, representing their share in the strategy. Binance then sells call options against the deposited Bitcoin, distributing most of the option premiums as yield to participants. All positions and yields are denominated in BTC, and only Bitcoin is accepted for participation. While this approach offers the potential for passive income, returns are not guaranteed and may be capped if Bitcoin’s price rises sharply, since the strategy involves selling at a predetermined strike price. Binance retains a 15% share of the gross option premiums before calculating user returns. This launch reflects the growing trend of integrating traditional finance strategies, such as covered calls, into the crypto sector. It provides new passive income opportunities for long-term holders, with similar products emerging in both crypto and traditional finance.
