BounceBit Launches Innovative Bitcoin Trading Strategy
BounceBit, a provider focused on crypto infrastructure that combines centralized (CEFI) and decentralized finance (DEFI) features, has rolled out a new Bitcoin (BTC) derivative trading strategy. This approach leverages BlackRock’s yield-generating tokenized money market fund, BUIDL, to optimize returns.
The trading strategy, which is available to both institutional and retail clients, consists of two primary elements. It involves taking long positions in the Bitcoin spot market while leveraging short positions in BTC futures, all collateralized with BUIDL tokens.
This so-called basis trade, or Cash and Carry Arbitrage, has produced an annual yield of 4.7%. In addition, writing put options contributed an extra 15%. When factoring in the 4.25% return from BUIDL, which served as collateral, the overall yield surpasses 24%.
By utilizing BUIDL as collateral, BounceBit has managed to generate higher revenues compared to strategies secured by Stablecoins.
“This strategy enables investors to capture arbitrage returns on Treasury invoice yields alongside funding rates,” stated Jack Lu, the CEO and founder of BounceBit, in an exclusive press release. “Our goal is to bridge the gap between asset issuers in the West and the crypto trading infrastructure in Asia, offering new avenues for yield generation,” Lu added.
BounceBit operates a reconstruction chain of native BTC, secured by staking both Bitcoin and BounceBit tokens. The platform enables BTC holders to earn returns through various methods, including Native Validator Staking featuring CEFFU, a MainNet Digital ecosystem, and both DEFI and CEFI functionalities. At present, it boasts a market cap exceeding $500 million.
Moving forward, BounceBit plans to introduce its BUIDL-Collateralized Strategy for institutional and retail investors. A spokesperson expressed, “The successful pilot has affirmed our concept for a new product line named BB Prime, accessible to all types of users.”
Moreover, the strategy is designed to support BB Prime as a new category of CEDEFI applications, which are built atop Real World Assets (RWA). The spokesperson pointed out that this not only potentially enhances yield generation but also addresses traditional issues related to utility limitations.
Initially launched by Securitize and BlackRock in March 2024, BUIDL is a tokenized investment fund that operates across multiple blockchains, including Ethereum, Aptos, and Polygon. The token currently has a market capitalization of about $2.88 billion and is backed by short-term U.S. government bonds, maintaining a stable value pegged around $1 per token.
