Kraken Institutional partners with Bitwise to launch its first crypto yield management strategy

PANews reported on February 5th that, according to The Block, Kraken Institutional announced the launch of its first custodial investment strategy product, a partnership with asset management firm Bitwise to offer the "Bitwise Customized Return Strategy." This product aims to provide qualified institutional clients with professional, return-oriented strategies, allowing them to generate returns from their crypto asset holdings through strategies such as call options while their assets remain under Kraken custody. Bitwise handles portfolio management, while Kraken provides custody, execution, and risk monitoring.

A Kraken spokesperson confirmed that the initial strategy focuses on Bitcoin and employs a covered call option strategy, generating profits by selling call options on Bitcoin holdings. This strategy provides some buffer when Bitcoin falls (option income can offset some losses), but its potential profit cap will be limited during significant market rallies.