BlackRock moved closer to launching its Bitcoin Yield ETF, which aims to generate income through covered call strategies while tracking Bitcoin exposure.
Bitcoin ETF News
BlackRock submitted the fourth amendment to the registration statement for its iShares Bitcoin Premium Income ETF with the Securities and Exchange Commission (SEC) on June 9. The filing moves the product further through the federal approval process. BlackRock has not yet received final SEC clearance.
The fund is built around two objectives. Firstly, it tracks the price of Bitcoin ($BTC) while generating income through the active sale of call options on IBIT shares. Secondly, the fund will occasionally write options on ETP indices to produce additional yield.
"The purpose of the Trust is to reflect generally the performance of the price of Bitcoin while providing premium income through an actively managed strategy of writing (selling) call options primarily on IBIT shares and, from time to time, on ETP Indices," the filing states.
Fee Structure and Competitive Position
The fourth amendment confirmed a sponsor's fee of 0.65%. The fund will trade on the Nasdaq under the ticker symbol BITA once approved. That fee sits below the two largest covered call Bitcoin ETFs currently on the market, which charge 0.95% and 0.99%, respectively.
A covered call strategy generates income by selling another party the right to buy an asset at a fixed price. The seller collects a cash premium regardless of whether that option is exercised. The trade-off is that sharp upward moves in $BTC may result in capped returns for investors holding the fund.
BlackRock Moves To Beat Goldman to Market
Bloomberg Senior ETF Analyst Eric Balchunas said he expects the fund to launch "very soon." He cited Goldman Sachs as the competitive pressure shaping the timeline. Goldman Sachs filed for a $BTC ETF that invests in other Bitcoin ETFs, with an effective date of around July 1, according to Balchunas.
"They're under gun to beat Goldman to [market] who is going to be effective around July 1," Balchunas said. "Game on." Both products would compete for the same pool of institutional capital seeking Bitcoin exposure with an income component.
The iShares Bitcoin Premium Income ETF is a separate product from BlackRock's existing IBIT fund. IBIT holds approximately $47.21 billion in net assets, and remains the largest spot Bitcoin fund by assets in the United States. The new product targets investors who prioritize income over direct price exposure.
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