BlackRock has launched a new exchange-traded fund (ETF) aimed at enabling yield generation on Bitcoin investments.
According to the company’s filing with the U.S. Securities and Exchange Commission (SEC), BlackRock is working on a new product called the “iShares Bitcoin Premium Income ETF.” This ETF aims to offer investors direct exposure to spot Bitcoin while also providing them with a regular income stream.
The new fund will track prices largely by directly holding BTC, similar to BlackRock’s already traded iShares Bitcoin Trust ETF (IBIT). However, what sets this product apart is its aim to generate additional returns through an actively managed “covered call” strategy.
According to the application, the fund’s investment advisor will primarily sell call options on IBIT shares to generate income. Options on other Bitcoin-tracking ETP indices may also be used from time to time. The option premiums earned under this strategy will constitute a regular income source for the fund.
The iShares Bitcoin Premium Income ETF, which has yet to reveal a ticker, will join the ranks of covered call-based investment products developed for crypto assets. These funds aim to generate monthly income by foregoing a portion of the potential upward movement in the BTC price. In this respect, the product aims to adapt a “yield” mechanism similar to the returns provided through staking in Ethereum or Solana ETFs to Bitcoin ETFs.
*This is not investment advice.
