SoFi’s Crypto Banking: Progress for Bitcoin, But a Yield Gap Remains
SoFi’s crypto trading debut as a regulated crypto bank marks a step forward for mainstream digital assets, opening access as investors continue to find new opportunities to address the Bitcoin yield gap.
In November 2025, SoFi Bank made headlines by becoming the first nationally chartered bank to offer cryptocurrency trading and crypto custody services to retail customers. This one-stop-shop approach allows consumers to buy, sell, and hold crypto assets like Bitcoin and Ethereum within a regulated banking platform, alongside traditional banking products.
SoFi’s crypto trading launch: A milestone in mainstream adoption
As the only FDIC-insured U.S. bank to facilitate cryptocurrency exchanges, the launch of “SoFi Crypto” marks a pivotal moment when “banking meets crypto in one app,” enabling members to manage cryptocurrency payments and crypto investing alongside everyday banking with bank-grade security.
SoFi Technologies CEO Anthony Noto hailed the launch as a significant move that bridges the long-standing gap between traditional finance and digital assets, providing millions of users a secure and regulated way to access and trade crypto through a national bank charter.
This means SoFi members can now purchase crypto assets directly from their FDIC-insured checking or savings accounts without moving funds to their primary crypto exchange platforms. SoFi also plans to introduce a USD stablecoin and integrate crypto into its lending and infrastructure services. Noto believes that blockchain technology will fundamentally transform finance, making money movement faster, cheaper, and safer, while opening new ways for people to borrow, invest, spend, and save.
This milestone comes amid a broader wave of institutional warming to Bitcoin and other digital assets. Crypto ownership hit an all-time high in 2025, with SoFi reporting that ownership among its members doubled and many prefer to use a licensed bank for crypto if given the choice. Major financial institutions are increasingly acknowledging demand for crypto exposure.
Last month, we reported that Morgan Stanley’s Global Investment Committee (GIC), for example, issued guidance in October 2025 recommending that certain client portfolios allocate up to 4% to cryptocurrency for “opportunistic growth” objectives.
Notably, the same guidance suggested a 0% allocation for the most conservative (wealth preservation or income-focused) investors, illustrating a tailored 0–4% range depending on risk profile. For a Wall Street stalwart to endorse any crypto allocation marks a dramatic shift.
In fact, BlackRock and Fidelity have likewise floated modest (~2%) Bitcoin allocations in their investment products, while other asset managers suggest even higher (5–6%) weights.
For many observers, the mere fact that blue-chip institutions like Morgan Stanley and BlackRock are now advocating crypto exposure is a clear sign of how far Bitcoin has come into the mainstream
SoFi’s entry into crypto banking and Morgan Stanley’s endorsement of Bitcoin allocations are complementary signals of this mainstream adoption trend. One is a fintech bank integrating crypto for everyday users, the other a global investment bank green-lighting Bitcoin as a portfolio asset.
Together, they underscore a broader narrative: digital assets are moving from the fringes toward the financial core. Importantly, U.S. regulators have started to provide clearer frameworks, the Office of the Comptroller of the Currency (OCC) in early 2025 explicitly authorised banks like SoFi to offer crypto services. which has prompted several other banks to announce plans to explore crypto products as well.
In short, the institutional barriers to Bitcoin are gradually falling.
The progress and the problem: Access grows, but yield is still absent
SoFi’s crypto offering represents real progress in access: it enables consumers to hold Bitcoin in a regulated bank setting, a scenario almost unimaginable a few years ago. Similarly, the anticipated approval of Bitcoin exchange-traded funds (ETFs) and the proliferation of custodial wallets mean that investors, from retail to high-net-worth, have more avenues than ever to buy and hold Bitcoin. However, these traditional offerings share a critical limitation: they provide price exposure to Bitcoin, but no yield or income on those holdings.
For high-net-worth individuals (HNWIs), family offices, and other professional allocators, this is a growing problem. Despite rising institutional acceptance of Bitcoin as an asset, most conventional crypto investment vehicles remain passive. Whether it’s holding Bitcoin in a SoFi account, a spot Bitcoin ETF, or a cold-storage wallet, the strategy is typically buy, hold, and hope.
Bitcoin itself, as a commodity-like asset, produces no interest, dividends, or cash flow. An investor’s only chance at profit is through price appreciation, essentially, waiting for BTC’s price to rise. Meanwhile, the volatility of Bitcoin remains high, yet none of that volatility is harnessed for the investor’s benefit in passive holdings. The result is what we might call the “Bitcoin yield gap.”
Consider an HNWI or family office that heeds Morgan Stanley’s guidance and allocates a small percentage (say 2–4%) of their portfolio to Bitcoin. Using traditional avenues, they could buy an ETF or custody coins with a bank like SoFi. Months or years later, their Bitcoin position will be the same size (in BTC terms) as initially, no larger, unless they contribute more capital or Bitcoin’s market price rises.
In the interim, their exposure will have ridden through Bitcoin’s sharp price swings with no compensating income. In contrast, most other asset classes offer some yield component: equities pay dividends, bonds pay interest, real estate can generate rent.
Bitcoin in a static hold is an idle asset. This lack of yield not only forgoes potential compounded growth, but also leaves allocators fully exposed to downside volatility without any cash inflow to offset it.
In essence, the current mainstream crypto offerings solve the access problem but not the productivity problem of Bitcoin assets.
Radiance Multi-Strategy Fund: A Yield solution for professional Bitcoin holders
This is where Radiance Multi-Strategy Fund enters the picture as a differentiated solution tailored for professional investors seeking to put their Bitcoin to work.
Radiance is a professionally managed, institutional-grade crypto hedge fund that generates income directly in Bitcoin (BTC) using a proprietary options-based strategy.
Unlike passive vehicles, Radiance actively manages a Bitcoin position to harvest option premiums and volatility, converting market fluctuations into yield. Crucially, it does so without capping the upside potential of Bitcoin’s price movements.
Investors remain fully exposed to any increase in BTC’s price, while simultaneously earning incremental BTC through the fund’s strategy.
In 2025, Radiance’s approach has delivered remarkable results. As of October 2025, the fund had generated over 45.3% more Bitcoin year-to-date for its investors, meaning an investor holding 1 BTC in the fund at the start of the year would have ~1.453 BTC by October, before any market price gains. This income is paid and compounded in BTC (the fund distributes income in Bitcoin and reinvests it), so investors steadily accumulate a larger Bitcoin position over time.
Radiance effectively turns Bitcoin’s notorious volatility into a source of return: the fund has consistently produced BTC-denominated income in both up and down markets by selling high-premium options and capturing market dislocations, all while actively hedging downside risk.
Every month, the earned BTC is reinvested, boosting the base for the next cycle of returns, a compounding effect that accelerates growth relative to a static holding.
Radiance is not a retail product, but rather is designed for wholesale, accredited, and institutional investors who already view Bitcoin as a strategic asset in their portfolio. These sophisticated allocators are looking beyond “buy and hold”; they seek to grow their Bitcoin stack and manage risk rigorously.
Radiance meets that need through a regulated offshore fund structure with full service institutional risk management and custody. The fund operates as a Cayman Islands registered mutual fund (available only to qualified investors in permitted jurisdictions), providing the kind of governance, transparency, and oversight institutions expect.
In other words, it wraps an innovative crypto strategy in an institutional-grade structure.
Key features of the Radiance Multi-Strategy Fund include:
- Bitcoin-Denominated Yield: Radiance extracts yield from Bitcoin’s price volatility using a proprietary option-premium strategy, generating income paid in BTC rather than in dollars. This allows investors to accumulate more bitcoins over time, effectively compounding their BTC holdings.
- Uncapped BTC Upside: Unlike certain covered-call funds or structured products, Radiance does not sacrifice Bitcoin’s upside potential. The strategy is engineered to earn premiums without capping price gains, so if Bitcoin’s market value surges, Radiance investors participate fully in that appreciation.
- Active Risk Management: The fund dynamically hedges and manages downside risk even as it harvests volatility. The goal is to deliver market-agnostic BTC returns, generating income in both bull and bear phases, while mitigating drawdowns. This contrasts with passive holding where the only defense is to endure market swings.
- Compounding Strategy: Income is generated and reinvested on a monthly basis, creating a compounding effect. Each BTC earned in a given period increases the principal (measured in BTC) for the next period’s income generation. Over time, this flywheel effect can lead to far greater Bitcoin accumulation than a static position, especially in range-bound or sideways markets where passive holders gain nothing.
- Outperformance vs. Passive Holdings: Year-to-date through Oct 2025, Radiance delivered a 45.3% BTC income return (i.e. 45.3% more bitcoins) for investors. Even after accounting for Bitcoin’s price movements, the fund has outperformed a pure BTC holding or any spot ETF on a BTC-denominated basis. In fact, Radiance has consistently outpaced passive Bitcoin exposure like ETFs or direct holdings by providing both yield and upside.
- Institutional Access and Structure: Radiance is offered within a regulated fund structure and is available only to qualified (accredited/wholesale) investors. It is specifically aimed at family offices, high-net-worth investors, and institutional allocators who view Bitcoin “not as speculation, but as strategy”. This focus ensures the fund’s strategy and operations align with the needs of professional investors – from tax considerations to custodial security and reporting transparency.
In summary, Radiance provides a solution to the Bitcoin yield gap by transforming a passive asset into an active, income-generating holding. It is positioned as “the smarter alternative to passive ETFs or static wallets” for serious Bitcoin allocators.
Rather than simply hoping for Bitcoin’s price to rise, investors in Radiance are making Bitcoin’s inherent volatility work for them, increasing their BTC balance regardless of market direction. This approach marries the long-term upside of Bitcoin with attributes more familiar to traditional investors: cash flow, compounding returns, and risk management.
Turning volatility into wealth, the new paradigm for Bitcoin allocation
SoFi’s foray into crypto banking and the broader institutional embrace of Bitcoin mark an important evolution. The problem of access is being solved, it’s becoming ever easier for both retail and professional investors to obtain Bitcoin exposure within trusted frameworks.
However, a deeper problem remains for those managing substantial portfolios: idle Bitcoin holdings come with all the volatility and none of the yield.
Parking Bitcoin in a brokerage account, ETF, or custody solution might check the box of exposure, but it leaves significant value on the table. The holder is still fully vulnerable to price swings and drawdowns, and the opportunity cost of not earning yield mounts over time (especially when compared to other assets that compound).