Binance has introduced a new product that offers yield to owners of Bitcoin (CRYPTO: $BTC).
Holders of BTC looking to earn yield on their investment without selling any of it can maximize their returns through Binance’s new “BTC Yield” product
BTC Yield is designed for people who already own Bitcoin in a digital wallet. More From Cryptoprowl: Users deposit their Bitcoin into BTC Yield and receive an internal position called “BTCY.” Binance holds the deposited Bitcoin as collateral while systematically selling BTC call options. The call option seller, or writer, gets compensated with a premium.
Binance collects those premiums and shares them with participants. Basically, Binance is running a “covered-call strategy” on users’ Bitcoin holdings. It’s a strategy that is common in traditional finance and among traders, though it usually involves stocks.