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▲ Bitcoin (BTC)
When Kraken launched its Bitcoin (BTC) Vault product, offering an annual yield of 2.5%, it attracted $30 million worth of deposits in just 10 hours, quickly revealing the demand for yield-generating Bitcoin products among long-term holders.
According to cryptocurrency media outlet Cointelegraph on May 28 (local time), cryptocurrency exchange Kraken launched a non-custodial product that allows Bitcoin holders to earn an annual yield of 2.5%. This product, Kraken Earn BTC Vault, was added to Kraken's suite of yield-generating products amid growing investor demand for crypto rewards products.
Kraken unveiled the product on Wednesday with the support of Veda, a crypto yield infrastructure provider. Veda explained that the product aims to reduce "the hassle of wrapping Bitcoin, moving assets, or managing crypto wallets." Cointelegraph reported that unlike Ethereum (ETH) or Solana (SOL), the Bitcoin blockchain does not have a structure that allows users to directly generate yield, leading to limited related development compared to the demand for yield-generating products from Bitcoin holders.
John Zettler, Product Director at Kraken Earn, stated, "Many Bitcoin holders on Kraken have made it clear that they want a simple way to earn yield on the Bitcoin they already plan to hold." Approximately 10 hours after the product launch, Veda announced that this Bitcoin yield product had surpassed $30 million in Bitcoin deposits from 4,000 unique wallets.
Three stablecoin yield products launched by Kraken on January 26 have surpassed approximately $245 million in customer deposits and generated over $2.2 million in revenue since their launch. This Bitcoin Vault product generates yield by exchanging Bitcoin for Kraken Wrapped Bitcoin (kBTC), which is then distributed by the cryptocurrency platform Sentora to crypto lending platforms such as Aave, Morpho, and Tydro.
The product is designed with a non-custodial structure, meaning only the depositor can withdraw or transfer funds. Withdrawals are expected to take approximately 5 days to process, and the service provider charges a 25% performance fee on rewards. The launch of Kraken's Bitcoin Vault indicates that Bitcoin investment demand, which was previously focused on simple holding, is expanding into the yield-generating product market.
*Disclaimer: This article is for investment reference only and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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