BlackRock Files Bitcoin Premium Income ETF With Covered-Call Strategy

New York — BlackRock, the world’s largest asset manager, has filed to launch a Bitcoin Premium Income ETF potentially worth $12.5 trillion. Unlike BlackRock’s earlier iShares Bitcoin Trust (iBIT), this ETF will use a covered-call strategy to generate regular income distributions, allowing investors to gain Bitcoin exposure while moderating volatility.

ETF Designed for Yield-Focused Investors

The new ETF will sell options on Bitcoin holdings to produce income. This approach is intended for investors seeking consistent returns without taking on the full swings of cryptocurrency prices. The strategy could appeal to institutional investors, family offices, and other market participants who want regulated Bitcoin exposure with lower risk compared to direct crypto investments.

BlackRock Focuses on Bitcoin and Ethereum

Industry experts note that BlackRock is concentrating its cryptocurrency strategy on Bitcoin and Ethereum, rather than diversifying across smaller coins. Bloomberg ETF analyst Eric Balchunas observed that this approach “signifies they are going to build around BTC and ETH, and lay off the rest, at least for now,” highlighting BlackRock’s targeted investment focus.

The move also positions BlackRock to compete aggressively with existing Bitcoin covered-call ETFs, many of which may struggle to match the scale and credibility of BlackRock’s offering.

Institutional Investment Flows Into BlackRock ETFs

BlackRock’s cryptocurrency ETFs are attracting substantial investment from institutional investors, including major asset managers and pension funds. The firm’s success with the iShares Bitcoin Trust (iBIT), which manages $87 billion in assets, demonstrates widespread adoption of regulated crypto products.

X user Crypto Ex-Insider noted that BlackRock’s crypto products are designed to meet institutional compliance and risk standards, making them attractive to large financial organizations.

Leon Waidman, head of research at Onchain Foundation, highlighted BlackRock’s rapid growth:

BlackRock built a quarter-billion-dollar business almost overnight. Many fintech firms do not achieve that in a decade. This shows that regulated cryptocurrency products can generate significant revenue for established financial institutions.

The combination of high asset volumes, regulatory compliance, and income-focused product structures positions BlackRock as a leader in institutional cryptocurrency investment.

iBIT Leads U.S. Bitcoin ETF Market

Launched in early 2024, iShares Bitcoin Trust (iBIT) manages $87 billion in assets, controlling nearly 60% of the U.S. Bitcoin ETF market. iBIT generates over $218 million in annual revenue from Bitcoin products, plus $42 million from Ethereum funds.

Despite being smaller than BlackRock’s S&P 500 ETF (IVV) in assets, iBIT surpasses IVV in revenue, reflecting strong institutional demand for regulated cryptocurrency investments.

Covered-Call Strategy Reduces Volatility

The proposed Bitcoin Premium Income ETF uses a covered-call approach, selling options on Bitcoin to provide steady income distributions. This strategy reduces exposure to sudden market swings while maintaining participation in Bitcoin’s price movement.

By combining yield with regulated cryptocurrency exposure, BlackRock aims to expand its presence in the institutional crypto market and reinforce its position as a leading provider of Bitcoin and Ethereum investment products.

Also Read: Michael Saylor Predicts $13M Bitcoin — BlackRock’s Bitcoin ETF Could Explode 12,770%