VP of Product
Institutional-grade digital asset exposure
Last month, I wrote about how corporate treasurers and institutional fund managers are exploring digital assets to maximize cash returns in an environment of historically low interest rates. Against that backdrop, Circle Yield is becoming a more popular way for cash and portfolio managers to get fixed-term digital asset upside without having to invest directly in bitcoin, ether or other cryptocurrencies.
I want to share an example of how one client — noted entrepreneur and crypto advocate Kevin O’Leary¹ — is using Circle Yield at his venture firm, O’Leary Ventures. O’Leary followed the digital asset space for years, but stayed on the sidelines until recently. After hiring a team to help him build out a digital asset strategy, he evaluated the landscape and allocated a portion of the venture firm’s balance sheet into Circle Yield.
A shrewd investor spots his opportunity
What won him over? First off, Circle Yield is specifically designed for institutions. It’s a fixed-term security offered under a clear regulatory framework, with a rate that’s much higher than what’s available from banks and many fixed income markets, plus a choice of terms ranging from one month up to a year.* It’s also overcollateralized, with all underlying bitcoin collateral held by a third-party custodian that serves more than 400 institutional clients.
O’Leary was also drawn to the currency that underpins Circle Yield. It’s built on USD Coin (USDC), a full-reserve dollar digital currency that’s highly liquid in markets around the world. USDC is fully backed by cash and equivalents and short-duration U.S. Treasuries, so that it is always redeemable 1:1 for U.S. dollars.
O’Leary Ventures’ allocation into Circle Yield has been so successful that several of the venture fund’s portfolio companies are now considering similar investments. Earning above-market returns can be a powerful way to extend cash runway, enabling them to do more without needing to raise additional capital. And with terms as short as one month, the portfolio companies earn these superior returns without locking working capital away long-term so they can retain operational flexibility.
In his own words
“This is the new asset class. Circle Yield was the right choice, and it works because the team is very focused on compliance. Circle Yield is one of the best catalysts to the success of O’Leary Ventures in the digital asset world.” — Kevin O’Leary
To learn more about Circle Yield, book a meeting with one of our digital asset experts today.
¹Kevin O’Leary has invested in and is currently a stockholder of Circle Internet Financial Limited.
Offering subject to business approval, geographical availability~, and regulatory authorization, and there is no guarantee that the product will become available in a specific timeframe or to a specific customer or geography. Yield product offered through Circle International Bermuda Limited (“Circle Bermuda”). It is anticipated that Circle Bermuda will enter into lending arrangements with one or more institutional borrowers, including Genesis Global Capital, LLC** These lenders pledge and transfer Bitcoin into custody with a third party custodian as collateral for their USDC borrowings and Circle Yield investors benefit from a security interest in Circle Bermuda’s security interest in the pledged Bitcoin.
Circle is not a bank; your Circle Account is not a bank account, and any funds are not insured by the Federal Deposit Insurance Corporation, the Securities Investor Protection Corporation or by any US or foreign government agency, insurance fund, person or entity. For investors in the United States, investments described in this communication are offered by Circle Bermuda to “accredited investors” only in accordance with Regulation D, Rule 506(c) of the Securities Action of 1933, as amended. While Circle Bermuda is regulated by the Bermuda Monetary Authority for digital asset business, Circle Bermuda is not engaged in banking and deposit taking activities and is not regulated for these purposes. You should carefully conduct your own investigations and analyses in connection with any participation in this product, including its objectives, risk factors, fees and expenses and the information set forth in these materials. All prospective participants in the products described herein are advised to consult with their legal, accounting and tax advisers regarding any potential participation. Please read the offering documents carefully before you invest. Additional information is available upon request.
~Not currently available in the following U.S. states: Alaska, Minnesota, New York and Hawaii.
*Rates are purely indicative and are subject to change pending availability, approval and market conditions. Withdrawal requests for fixed term accounts could take up to 72 hours in high withdrawal periods and will be subject to an early withdrawal penalty.
**Learn more about Genesis Global Capital, LLC here.
© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.