BounceBit Launches Bitcoin Trading Strategy Using BlackRock’s BUIDL Fund
BounceBit has launched a bitcoin (BTC) derivatives trading strategy leveraging BlackRock's tokenized money market fund, BUIDL, aimed at enhancing returns for both institutions and retail users.
- The strategy includes a bitcoin basis trade with a long position in the spot market and shorting futures, along with a short position in BTC put options, all collateralized by BUIDL tokens.
- The basis trade generated an annualized yield of 4.7%, while put option writing added 15%. Combined with a 4.25% return from BUIDL as collateral, total yield exceeded 24%.
- This approach offers higher returns than strategies using stablecoin collateral, which do not yield returns.
- Jack Lu, CEO of BounceBit, highlighted that the strategy allows investors to capture Treasury Bill yields and funding rate arbitrage returns.
- BounceBit connects Western asset issuers with Asian crypto infrastructure, providing new yield generation options.
- BUIDL, launched in March 2024, is a tokenized fund backed by U.S. government bonds, currently valued at $2.88 billion.
- BounceBit plans to launch the BUIDL-collateralized strategy soon and considers it a proof of concept for its upcoming BB Prime product line.