Kraken and Bitwise Launch Managed Crypto Investment for Institutions

Crypto exchange Kraken Institutional has partnered with Bitwise, a crypto investment firm to launch its first managed crypto investment strategy for institutional investors. 

This new offering shows the company’s effort to expand beyond simple crypto trading and custody services. It shows Kraken’s plan to meet rising demand for professionally managed crypto products.

Kraken and Bitwise Launch Bitcoin Yield Strategy for Institutions

As announced, the new product is called the Bitwise Custom Yield Strategy. It is built for approved institutional investors who want steady income from their crypto holdings.

Bitwise is said to manage the investment strategy, while Kraken will be handling custody, trading, and risk controls. The strategy focuses on Bitcoin (BTC). It uses a method called covered calls, where call options are sold against Bitcoin already held. 

This helps generate regular income and can reduce losses when Bitcoin prices fall. However, the strategy also limits profits when prices rise sharply, because gains are capped by the options sold.

Kraken Simplifies Institutional Access to Crypto Yield

Many institutions hold crypto but earn no regular income from it. Before now, earning yield often meant working with several platforms and service providers. 

Kraken’s new setup lets asset managers like Bitwise run strategies while the crypto remains in Kraken’s custody. This makes the process simpler, clearer, and safer. Over time, Kraken plans to add more managed strategies and work with more asset managers. 

The goal is to create one platform where institutions can access different crypto investment options with better control and lower complexity.

Institutions Shift Toward Managed Crypto Investments

This launch reflects a wider trend in the crypto market. Institutions are no longer just holding crypto. They now want investment products that can earn income and manage risk in unstable markets.

This shift was highlighted in recent Kraken research. Kraken economist Thomas Perfumo said the crypto market is changing fast, with institutions demanding more structured and professionally managed investment options.

Big firms like BlackRock and Fidelity have already introduced managed crypto products. Crypto exchanges such as Coinbase have also expanded their institutional services.

Reports show that the use of crypto derivatives and structured products by institutions has grown steadily. This shows strong demand for more advanced and well-managed crypto investments.