BounceBit Deploys Bitcoin Trading Strategy with BlackRock’s BUIDL as Collateral Support

BounceBit Unveils Bitcoin Trading Strategy Collateralized by BlackRock’s BUIDL Token

BounceBit, a pioneering crypto infrastructure firm that merges CeFi and DeFi features, has successfully piloted a bitcoin derivatives trading strategy leveraging BlackRock’s yield-generating tokenized money market fund, BUIDL, as collateral to maximize returns.

Scheduled for release to institutional and retail investors soon, the strategy employs two key approaches: a bitcoin basis trade—going long on spot BTC and short on futures—and selling short BTC put options. Both positions use BUIDL tokens as collateral.

The cash-and-carry basis trade delivers an annualized return of 4.7%, while put option writing adds roughly 15%. When combined with the 4.25% yield from BUIDL collateral, the overall annualized yield surpasses 24%.

By utilizing BUIDL tokens as collateral, BounceBit’s strategy offers better returns compared to stablecoin-backed approaches, which generally generate no yield.

Jack Lu, CEO of BounceBit, told CoinDesk, “This strategy allows investors to tap into both Treasury Bill yields and funding rate arbitrage profits.”

BounceBit’s platform operates as a native BTC restaking chain, secured through staking of bitcoin and BounceBit tokens. It offers multiple yield-generating avenues including validator staking, a growing DeFi ecosystem, and CeFi-like services powered by Ceffu and Mainnet Digital. Currently, the network holds over $500 million in locked assets.

The pilot’s success paves the way for the upcoming BB Prime product line, which will make this BUIDL-collateralized strategy available to both retail and institutional clients. A spokesperson explained, “BB Prime introduces a new category of CeDeFi applications built on real-world assets, addressing the longstanding challenge of limited utility beyond Treasury Bill yields.”

BUIDL, launched by Securitize and BlackRock in March 2024, is a tokenized money market fund backed by short-term U.S. government bonds. It operates across Ethereum, Aptos, and Polygon blockchains and maintains a stable $1 peg per token with a market cap of $2.88 billion.