Earn BTC yield on Bitcoin you hold, with BTCaf.

Bitcoin yield is a return earned on BTC that you continue to hold, measured in BTC. It is different from staking. Ethereum and Solana pay validators for securing the network. Bitcoin's proof-of-work design has no equivalent, so there is no native Bitcoin staking. Anyone offering yield on Bitcoin is doing something else with it, and the first question to ask is what.

There are three broad approaches. Lending: a platform takes your BTC and lends it to institutional borrowers, paying you part of the interest. DeFi: your BTC is wrapped and deposited into on-chain lending or liquidity protocols. Delta-neutral trading: the BTC is used as collateral or as one leg of a hedged position, and the return comes from a spread or funding rate rather than from price movement.

Each approach carries a different risk. Lending exposes you to the borrower and to the platform's balance sheet. DeFi exposes you to smart contract and bridge risk. Delta-neutral strategies expose you to basis risk and execution risk. Abra's strategy sits in the third category, and the rest of this page explains how.

When you allocate, your BTC is exchanged for sBTCaf, issued by AbraFi, an ACM affiliate. Your account holds the tokens at Fireblocks Trust; AbraFi holds and deploys the underlying BTC under the strategy terms. Against that BTC, the strategy borrows stablecoins at a conservative loan-to-value ratio. The stablecoins, not the Bitcoin, are what get deployed. Venues include basis trading (holding spot against an offsetting hedge and collecting the spread), DeFi lending on institutional protocols, stablecoin liquidity provision, tokenized real-world credit, and systematic covered-call options on BTC.

Delta-neutral means the strategy's return is designed not to depend on whether Bitcoin goes up or down. In a basis trade, for example, a long spot position and an offsetting short hedge cancel out each other's price exposure. What remains is the spread paid by traders who want leverage. That spread is the yield. Every strategy in the allocation runs on the stablecoin side or is delta-hedged.

The earned yield is periodically converted to Bitcoin and added back to your position. Allocation across strategies is rebalanced regularly within risk limits. Returns are variable and not guaranteed. Funding rates can fall to zero or turn negative, borrowing costs can rise, and a strategy can lose money in a given period.

In-kind yield is paid in the same asset you deposited. You put in Bitcoin, and your Bitcoin balance grows. You are not paid in dollars, in a platform token, or in a stablecoin that you then have to convert. The number of BTC in your account is the scoreboard.

That matters for two reasons. First, there is no forced conversion. A dollar-denominated payout means someone sold something to produce it, and you end up holding an asset you did not choose. With in-kind yield your exposure stays where you put it. Second, compounding happens in the asset. Each period's yield is added to the position and earns alongside the original balance.

In-kind yield is still generally taxable when received, at the fair market value of the BTC on that date. Receiving it in Bitcoin rather than cash does not change that, but it does mean you may owe tax on an asset you have not sold. Plan for it.

Rehypothecation is when a platform takes the assets you deposited and lends them onward, usually to institutional borrowers, to fund the interest it pays you. Your account shows a balance. The actual coins are somewhere else, and your claim is on the platform, not on the coins.

This is the structure that failed in 2022. Celsius and BlockFi both lent customer deposits to third parties. When those borrowers could not repay, the platforms could not return customer assets and filed for bankruptcy. Customers became unsecured creditors and waited years for partial recoveries.

When you allocate, your BTC is exchanged for sBTCaf, issued by AbraFi, an ACM affiliate. Your account holds the tokens at Fireblocks Trust; AbraFi holds and deploys the underlying BTC under the strategy terms, including as collateral for a stablecoin borrow. That adds counterparty, wrapper and smart-contract risk, described under the risks below.

Your account is titled to you and held by Fireblocks Trust Company, LLC. ACM is your investment adviser. While allocated to the strategy, your account holds sBTCaf, issued by AbraFi, an ACM affiliate; AbraFi holds and deploys the underlying BTC under the strategy terms.

Key security uses Fireblocks multi-party computation. Private key material is split across independent parties, so no single party, including Abra, can move assets alone. Every transaction must also pass a hardware-enforced policy engine with pre-set rules before it is broadcast. Abra products are not bank deposits and are not FDIC or SIPC insured. The custody page covers the structure, the fee, and the risks in detail.

Counterparty risk. The stablecoins are deployed on trading venues and DeFi protocols. A venue can fail or a protocol can be exploited. Custody at Fireblocks Trust does not protect the underlying BTC held and deployed by AbraFi, or deployed stablecoins, from venue or protocol failure. Losses in a strategy reduce your yield and can reduce your position.

Basis and rate risk. Funding rates and lending rates are set by the market. They can compress, go to zero, or turn negative. Borrowing costs on the stablecoin side can rise. When that happens yield falls and a period can show a negative return. Liquidation risk. The stablecoin borrow is collateralized by your BTC at a conservative LTV. A sharp fall in the Bitcoin price raises that LTV and the strategy may need to unwind positions.

Liquidity risk. Withdrawals from BTCaf are processed at the end of each month with a 30-day withdrawal period, so this is not an instant-access product. Smart contract risk applies to the DeFi components. You can lose BTC. Past performance does not predict future results.

This is a structural comparison, not a rate comparison. Rates change weekly and the headline number rarely tells you where the risk sits. What matters is who holds the coins, what is done with them, and who regulates the operator.

Centralized lenders typically hold your BTC in an omnibus wallet on their own balance sheet and lend it onward. You hold a claim on the company. Regulatory status varies by jurisdiction and product. DeFi vaults are non-custodial: you hold the keys and interact with smart contracts directly, with no operator to call and full smart contract exposure. Staking proxies, such as wrapped BTC deposited into other chains' protocols, add bridge risk on top.

Abra's structure is a separately managed account titled to you and held at Fireblocks Trust Company, LLC, holding sBTCaf issued by AbraFi, an ACM affiliate, with an SEC-registered adviser managing the strategy. The trade-offs are an advisory relationship, monthly rather than instant liquidity, and less control over individual positions than a DeFi vault gives you.

Generally, yes. Yield received on Bitcoin is treated as ordinary income in the year you receive it, measured at the fair market value of the BTC on the date it is credited to you. The fact that it arrives in Bitcoin rather than in dollars does not change that treatment. Each credit also establishes a new lot with its own cost basis and holding period.

Later, when you sell or exchange those BTC, you will have a capital gain or loss measured against that basis. Transferring BTC into an account titled to you is generally not a sale. Exchanging BTC for sBTCaf may have tax consequences; consult your tax adviser. Abra does not provide tax advice. Confirm treatment with a qualified adviser, and see our broader tax guide for loans and yield.

Long-term holders who want their stack to grow in BTC terms without selling, and who can accept monthly liquidity and the risks above. If your plan is to hold Bitcoin for years, yield compounding in kind can add to the end balance over time, though returns are variable and can be negative.

Corporate treasuries and long-term capital pools that already hold Bitcoin and want a BTC-denominated return to report against. For these clients the yield is a key performance indicator on an asset they were going to hold anyway. It is not suitable for anyone who needs instant access to their BTC, cannot tolerate a period of negative return, or is looking for a guaranteed rate. There is no guaranteed rate.

Open an account. That means identity verification and an advisory agreement with Abra Capital Management. There is no investment minimum for BTCaf and no management fee on the strategy.

Transfer your Bitcoin in kind. You send BTC from your wallet or exchange to your separately managed account. When you allocate, your BTC is exchanged for sBTCaf, issued by AbraFi, an ACM affiliate. Your account holds the tokens at Fireblocks Trust; AbraFi holds and deploys the underlying BTC under the strategy terms. Reporting is monthly and withdrawals are processed at the end of each month. Your specialist will walk you through each step.

ACM's fees are listed on the Fees page.