Kraken Institutional supports Lombard's transition to institutional Bitcoin yield

Lombard is transitioning its Bitcoin yield source from staking to an institutional covered-call strategy managed by Bitwise Asset Management, targeting a 2.5% net annual percentage yield in Bitcoin terms. Kraken Institutional will facilitate this shift by providing custody and execution services. Bitcoin backing the strategy will be held in segregated, bankruptcy-remote accounts at qualified custodians, including Kraken, under tri-party agreements to maintain qualified custody throughout the process.

Kraken Institutional’s role includes serving as an execution venue for the options trades underlying the Bitwise strategy. Gurpreet Oberoi, Head of Kraken Institutional, emphasized that the Bitcoin deployed in this strategy remains within qualified custody, meeting institutional allocators’ requirements. The arrangement reflects Kraken’s dual function in both custody and execution for institutional Bitcoin operations.

This collaboration is part of a broader initiative by Kraken Institutional to expand Bitcoin yield solutions for institutions. The approach integrates custody as the foundation, with execution, financing, and yield generation layered on top. The partnership with Lombard builds on existing work with Bitwise, Upshift, and Centrifuge to develop institutional-grade Bitcoin yield products.

The initiative signals a growing trend toward Bitcoin as productive collateral in institutional strategies. Kraken views this as an early step in a broader shift and plans to deepen its relationship with Lombard while expanding its institutional offerings. Custody services are provided by Payward Financial, Inc. or Payward Europe Solutions, Ltd, as applicable, with regulatory oversight from the Central Bank of Ireland for European operations.