BounceBit Unveils High-Yield Bitcoin Trading Strategy Using BlackRock’s BUIDL Token

BounceBit, a hybrid crypto infrastructure provider combining CeFi and DeFi elements, has piloted a bitcoin derivatives trading strategy that leverages BlackRock’s yield-bearing tokenized money market fund, BUIDL, as collateral to amplify returns.

Set to launch soon for both institutional and retail investors, the strategy revolves around two key tactics: executing a bitcoin basis trade—holding a long position in spot BTC while shorting futures—and selling short BTC put options. Both positions are collateralized by BUIDL tokens, enabling enhanced yield generation.

The basis trade, a form of cash-and-carry arbitrage, delivered an annualized yield of 4.7%, while writing put options contributed roughly 15%. Coupled with the 4.25% yield from BUIDL itself, the overall annualized return of the strategy exceeds 24%.

Using BUIDL as collateral provides a yield advantage over stablecoins, which typically offer no return.

Jack Lu, CEO and founder of BounceBit, shared with CoinDesk, “This strategy captures income streams from both Treasury Bill yields and funding rate arbitrage, creating a compelling option for investors.”

He added, “BounceBit bridges the divide between Western real-world asset issuers and Asian crypto infrastructure, paving the way for innovative yield products.”

BounceBit operates as a native BTC restaking network, secured by staking both bitcoin and BounceBit tokens. It offers BTC holders multiple yield opportunities via validator staking, a DeFi ecosystem, and CeFi-like mechanisms powered by partners Ceffu and Mainnet Digital. Currently, the platform holds over $500 million in locked crypto assets.

The company plans to introduce the BUIDL-collateralized strategy to a wider audience soon. A spokesperson stated, “Our pilot validates the upcoming BB Prime product line, aimed at both retail and institutional users.”

They further explained, “BB Prime represents a new category of CeDeFi applications built on real-world assets, which have struggled to find utility beyond Treasury Bill yields, limiting broader market adoption.”

BUIDL, launched in March 2024 by Securitize and BlackRock, is a multi-chain tokenized fund backed by short-term U.S. government bonds. It maintains a stable value pegged at $1 per token and currently boasts a market cap of $2.88 billion.