Kraken Launches Bitcoin Yield Product

Kraken Adds Bitcoin Yield to Its Earn Suite

Kraken (@krakenfx) launched Bitcoin Vault on May 27, 2026, offering $BTC holders up to 2.5% APY in auto-compounding BTC-denominated rewards. The product lets users earn on bitcoin while maintaining full price exposure, without selling or actively managing assets across DeFi protocols.

The new product sits inside Kraken's Earn suite alongside its existing DeFi offerings for USDC and other assets. Rather than requiring users to bridge assets, manage wallets, or track protocols manually, Kraken packages the entire strategy inside its Earn platform for a streamlined experience.

How the Vault Works

Once deposited, bitcoin is wrapped into kBTC and moved to a non-custodial embedded wallet on the Ink network. Kraken handles wallet management through Privy OTP verification, meaning users do not need to manage external wallets or seed phrases. A Veda-powered vault then deploys the funds using a strategy managed by Sentora, supplying kBTC as collateral to lending protocols including Aave and Morpho, borrowing stablecoins against it, and routing those stablecoins into reward-generating DeFi positions. Rewards convert back to kBTC and redeploy automatically.

The yield is quoted at approximately 2.0% net of fees, with a ceiling near 2.5% APY during the initial launch period. Providers take a 25% performance fee from rewards, though the projected 2.5% figure is inclusive of that fee. Withdrawals can be requested at any time, but funds may take up to five days to return.

Kraken is transparent about the risks involved. Rewards are variable and not guaranteed, and users can lose some or all of their assets. Risks include smart contract bugs, exploits, oracle failures, bridge failures, price volatility, and liquidation. The exchange does not control the third-party protocols used by the vault.

The launch builds on momentum from Kraken's USDC Vaults product, which crossed $240 million in assets since its January 2026 debut without relying on incentive programmes. It also comes as Kraken expands its product range ahead of a planned initial public offering later in 2026.

Bitcoin Vault is live via Kraken web, Kraken Pro web, the Kraken app, and the Krak app. It is available in all Kraken operating jurisdictions except the UK, UAE, and Australia.

Sources:
Kraken Blog: Announcing Bitcoin Vault
CoinDesk: Kraken debuts Bitcoin Vault
Decrypt: Kraken Now Lets You Earn Yield on Bitcoin Holdings