Two Prime, Figment team up to bring Bitcoin yield to institutions
News Summary
US investment adviser Two Prime has partnered with staking infrastructure provider Figment to offer institutional clients access to cryptocurrency yield opportunities, specifically for Bitcoin (BTC) and over 40 other digital asset protocols. Two Prime, an SEC-registered crypto-native investment adviser, manages approximately $1.75 billion in assets and operates a significant Bitcoin lending business, having previously received a minority stake investment from Bitcoin miner MARA Holdings. This move highlights the growing institutional shift towards blockchain-based yield strategies. The article notes that Bitcoin's outsized historical returns are pushing more investors toward yield strategies that generate income on otherwise idle holdings. Hedge funds, family offices, and asset managers increasingly view Bitcoin as part of a diversified portfolio and demand predictable returns. Coinbase has also launched its Bitcoin Yield Fund, targeting non-US investors with returns up to 8%, to address this growing institutional demand.
Background
Two Prime is a crypto-native investment adviser registered with the US Securities and Exchange Commission (SEC), managing roughly $1.75 billion in assets and operating one of the industry's larger Bitcoin lending businesses. A minority stake in the firm was acquired by Bitcoin miner MARA Holdings in July. Figment is a leading staking infrastructure provider, with services supporting over 40 digital asset protocols including Ethereum, Solana, and Avalanche. This partnership reflects growing institutional interest in blockchain-based yield strategies, moving beyond simple spot exposure. Other players like Solv Protocol, BOB, and Coinbase have also entered the Bitcoin yield space to cater to institutional demand.
In-Depth AI Insights
Why are institutions increasingly focused on Bitcoin 'yield' rather than just spot exposure, and what does this signify about Bitcoin's evolving role? - Institutions treat Bitcoin as part of a diversified portfolio, demanding predictable returns, unlike the pure holding mentality of crypto-native 'diamond hands.' This marks Bitcoin's maturation as an asset class, transitioning from a purely speculative asset to a more capital-efficient, income-generating financial product. - The emergence of yield strategies reflects investors' need to optimize capital allocation in digital assets, aiming to earn additional income through staking, lending, or options strategies while holding Bitcoin. This foreshadows deeper integration of Bitcoin into traditional financial product structures. What strategic implications does the partnership between a crypto-native adviser (Two Prime) and a staking provider (Figment) have for the broader institutional digital asset market? - This partnership model signals a trend towards specialization and ecosystem integration within the institutional crypto market. Two Prime can leverage Figment's specialized infrastructure to rapidly scale and diversify its yield offerings without incurring the cost and complexity of building all underlying technology from scratch. - It allows crypto-native institutions like Two Prime to focus more on front-end client relationships and investment strategies, while outsourcing technological complexities to Figment. This could lower barriers to entry and foster greater synergy among specialized digital asset ecosystem participants, accelerating institutional adoption. How might the Trump administration's stance on digital assets influence the expansion of institutional crypto yield products in the US? - The Trump administration has generally adopted a pragmatic approach to digital assets, often emphasizing innovation while balancing regulatory concerns. If this stance continues, it could indirectly support the growth of regulated institutional crypto products through clearer regulatory frameworks or at least a non-obstructive stance on innovation. - However, the SEC's stringent position in the crypto space, particularly the ambiguity around what constitutes a security, remains a critical constraint. While the administration may be broadly supportive, the specific actions of regulatory bodies will determine the extent of adoption and acceptance of these products within the US institutional landscape.