- BlackRock is preparing to launch the iShares Bitcoin Premium Income ETF, which will trade on Nasdaq under the ticker BITA and aims to provide investors with income from bitcoin exposure.
- The fund will generate income by holding bitcoin and shares of BlackRock’s IBIT ETF, then selling call options on 25% to 35% of its holdings each month, capping upside in exchange for steady premiums.
- BlackRock has set a 0.65% sponsor fee for BITA, undercutting rival covered-call bitcoin ETFs, and analysts expect the fund to launch soon as the firm races Goldman Sachs to market.
BlackRock is close to launching a bitcoin fund that pays an income.
The world's largest asset manager filed its fourth amendment for the iShares Bitcoin Premium Income ETF on Tuesday, according to its SEC filing. The fund will trade on Nasdaq under the ticker BITA.
The income comes from options. The fund holds bitcoin and shares of IBIT, BlackRock's $47 billion spot bitcoin ETF. Each month it sells call options on those IBIT shares.
A call option gives the buyer the right to purchase the shares at a set price. The fund collects a fee, called a premium, for selling that right. That premium is the income it hands to investors.
As such, selling calls caps how much the fund gains if bitcoin rallies hard. Investors take steady income in exchange for giving up part of a big move. The fund plans to write calls on 25% to 35% of its value at a time.
The fee is the edge, however. BlackRock set the sponsor's fee at 0.65%, which sits below the two largest covered-call bitcoin funds, YBTC and BTCI, which charge 0.95% and 0.99%, Bloomberg analyst Eric Balchunas said in a post on X.
