Valour, a subsidiary of DeFi Technologies, has launched a Bitcoin staking exchange-traded product (ETP) on the London Stock Exchange, aiming to provide investors with new opportunities for crypto yield as the UK prepares to ease regulations on digital assets. This development follows the UK’s recent moves to allow retail investors back into the crypto market, particularly with the planned permission for purchasing crypto exchange-traded notes (ETNs) set to resume from October 8, after a ban in effect since 2021.
The newly introduced Bitcoin staking ETP is described as having a 1.4% annual yield, and it is backed by Bitcoin (BTC) which is securely held in cold storage. The security of the fund is enhanced through multiparty computation (MCP) technology. Initially, access to this Bitcoin staking ETP is limited to institutional and professional investors, although broader access to retail investors is expected with the regulatory changes on the horizon.
The announcement did not detail how the yield would be generated, but Valour operates another Bitcoin ETP on a French exchange that uses coin delegation on the Core Chain for yield generation. Core Chain is recognized for being an EVM-compatible layer-1 blockchain supported by Bitcoin’s proof-of-work consensus mechanism.
Following the news, shares of DeFi Technologies experienced a 5% increase on the Nasdaq, reflecting positive investor sentiment.
While Bitcoin itself does not accrue staking yield, holders can achieve returns via various alternative investments. These include centralized lending platforms, Bitcoin layer-2 solutions like Stacks and Babylon, or converting Bitcoin into wrapped tokens like Wrapped Bitcoin (WBTC) to engage with decentralized finance (DeFi) lending protocols. This trend highlights the growing interest in yield-producing strategies related to Bitcoin, driven by institutional appetite for liquidity without the need to liquidate their holdings.
In May, cryptocurrency exchange Coinbase also launched a Bitcoin yield fund aimed at non-US institutional investors, indicating a rising demand for yield-bearing Bitcoin strategies in the market.
This launch coincides with a broader shift in the UK’s stance toward cryptocurrencies. Recent reports from the Financial Times suggest the UK government is exploring increased collaboration with the United States on digital assets, aiming to foster innovation in the sector. Trade organizations have advocated for the inclusion of blockchain technology in the UK’s tech partnership with the US, signaling a proactive strategy in response to evolving global trends in cryptocurrency and blockchain adoption.
