Kraken Launches Bitcoin Yield Product with Up to 2.5% Annual Yield

Kraken has entered the market for Bitcoin (BTC) yield products, allowing users to earn up to 2.5% annual yield by depositing their BTC into a vault. The service, which was launched on May 28, attracted $30 million in deposits within the first 10 hours of launch, indicating strong demand from investors.

The vault uses Kraken Wrapped Bitcoin (kBTC), a token pegged 1:1 to Bitcoin's price, which is then deployed across DeFi lending platforms such as Aave and Morpho to generate yield. This structure bypasses the limitations of Bitcoin's native blockchain, which lacks built-in mechanisms for yield generation.

Kraken's move underscores its strategy to expand into yield-generating products, a trend gaining traction among major exchanges. Earlier this year, Kraken launched stablecoin yield offerings, which now hold $245 million in deposits and have generated $2.2 million in yield since January.