Kraken has rolled out a new Bitcoin yield product designed to let holders earn a fixed annual return without giving up control of their assets. The Bitcoin Earn Vault offers a 2.5% yearly yield by converting users’ Bitcoin into Kraken Wrapped Bitcoin (kBTC), which is then deployed across established crypto lending protocols.
Within hours of launch, the product attracted an influx of deposits, amassing over $30 million in Bitcoin from 4,000 unique wallets. This demonstrates rising demand among Bitcoin holders for straightforward yield opportunities, especially as Bitcoin’s native blockchain lacks built-in mechanisms to generate passive income, unlike Ethereum or Solana.
Kraken’s Earn BTC Vault functions on a non-custodial basis, meaning depositors maintain sole control and custody of their funds. Withdrawals can be made at any time but typically require up to five days to process. The underlying yield is generated by swapping Bitcoin to kBTC, which is allocated across multiple lending platforms such as Aave, Morpho, and Tydro, via the crypto infrastructure provider Sentora. These platforms lend the tokens to borrowers, earning interest that is passed back to the Vault holders.
The service charges a 25% performance fee on rewards earned, aligning costs with yield generation. Kraken’s venture into Bitcoin yield products complements its existing stablecoin yield offerings, which have accumulated over $245 million since January and generated more than $2.2 million in returns for users.
According to Kraken’s Earn product director, many Bitcoin holders expressed a need for simple and secure yield options on holdings they intend to keep long-term. By removing technical complexities such as wrapping Bitcoin or managing multiple wallets, Kraken aims to simplify access to Bitcoin yield—an increasingly sought-after feature in the crypto market amid growing investor appetite for passive income on digital assets.