Kraken launches Bitcoin Vault with up to 2.5% APY

Kraken launched Bitcoin Vault on May 27, 2026, offering bitcoin holders a way to earn up to 2.5% annual percentage yield on deposited BTC through decentralized finance lending. Withdrawals are subject to a five-day deallocation period before funds return to a user’s Everyday balance.

Users deposit bitcoin from their Kraken accounts; the minimum deposit is about 0.00006 BTC. Kraken wraps deposited BTC into kBTC and moves the funds into a noncustodial embedded wallet on the Ink network. Account access to the wallet is managed with Privy one-time passcode verification so users do not need external seed phrases or separate wallets.

A Veda-powered vault runs an automated strategy managed by Sentora. The strategy supplies kBTC as collateral to lending protocols including Aave and Morpho, borrows stablecoins against that collateral, and places the borrowed funds into yield-generating DeFi positions. Rewards are converted back into kBTC and redeployed automatically, producing continuous compound returns. Kraken reports a net yield near 2.0% and a temporary launch ceiling close to 2.5% APY; displayed rates are variable and shown as trailing seven-day averages.

Deposits process in seconds on Kraken’s web and mobile platforms, including Kraken Pro and the Krak app. Withdrawals can be started at any time but take five days to deallocate before appearing in a user’s Everyday balance. Bitcoin Vault is offered by Payward Wallet, LLC and is available in most jurisdictions where Kraken operates; the United Kingdom, United Arab Emirates and Australia are excluded.

Kraken warns that yields are not guaranteed and can fall to zero or turn negative in stressed market conditions. The company lists smart contract bugs, oracle failures, protocol exploits and losses linked to leverage among possible risks. The strategy uses leverage by borrowing stablecoins against kBTC collateral, which increases exposure to bitcoin price moves and raises the possibility of partial or total loss of principal. There is no insurance comparable to traditional savings products. The product is distinct from staking, relying on DeFi lending mechanics rather than proof-of-work or proof-of-stake validation.

The Bitcoin Vault extends infrastructure Kraken introduced earlier in 2026 for stablecoin DeFi Earn vaults, which attracted more than $240 million in inflows. The launch follows Kraken’s 2025 integration with Babylon to offer native bitcoin staking. Kraken framed the product as a response to demand from customers who want simple ways to earn on bitcoin they plan to hold. Early user feedback highlighted fast onboarding and interest from long-term holders, while some users noted DeFi security incidents as a reason for caution. Kraken advises customers to confirm current APYs and product terms inside their accounts before depositing.