BounceBit Pilots Bitcoin Trading Strategy Using BlackRock’s BUIDL Token as Collateral
BounceBit, a crypto infrastructure provider blending centralized finance (CeFi) and decentralized finance (DeFi) features, has successfully executed a bitcoin (BTC) derivatives trading strategy that leverages BlackRock’s yield-generating tokenized money market fund, BUIDL, to boost returns.
This innovative strategy, set for upcoming launch to both institutional and retail investors, combines two core elements: a bitcoin basis trade—taking a long position in the spot market while shorting futures—and writing short BTC put options, both collateralized with BUIDL tokens.
The basis trade alone, often referred to as cash and carry arbitrage, delivered an annualized yield of 4.7%, while the put option writing added approximately 15%. When combined with the 4.25% yield generated by the BUIDL collateral itself, the overall strategy surpasses an annualized return of 24%.
Using BUIDL as collateral offers a distinct advantage over stablecoin-collateralized strategies, which typically do not generate any yield.
“This strategy enables investors to capture returns from both Treasury Bill yields and funding rate arbitrage,” said Jack Lu, founder and CEO of BounceBit, in an exclusive press release shared with CoinDesk.
“BounceBit bridges Western real-world asset issuers and Asian crypto trading infrastructure, unlocking new avenues for yield generation,” Lu added.
BounceBit operates as a native BTC restaking chain secured through staking of both bitcoin and BounceBit tokens. The platform enables BTC holders to earn yields via native validator staking, a DeFi ecosystem, and a CeFi-style mechanism powered by Ceffu and Mainnet Digital. Currently, over $500 million worth of cryptocurrencies are locked within BounceBit.
The company plans to roll out the BUIDL-collateralized trading strategy to both institutional and retail users shortly. A BounceBit spokesperson told CoinDesk, “The successful pilot validates our upcoming product line, BB Prime, which will be accessible to retail and institutional investors alike.”
The spokesperson further explained, “This strategy forms the foundation of BB Prime, a new class of CeDeFi applications built on real-world assets (RWAs). These assets have traditionally struggled with limited utility beyond holding for Treasury Bill yields, which has hindered broader adoption.”
BUIDL, launched in March 2024 by Securitize and BlackRock, is a tokenized investment fund operating across multiple blockchains including Ethereum, Aptos, and Polygon. Backed by short-term U.S. government bonds, BUIDL maintains a stable value pegged to one dollar per token and currently holds a market cap of $2.88 billion.
