BlackRock (BLK) is moving deeper into the cryptocurrency exchange-traded fund (ETF) market with a plan to offer revenue from bitcoin. exposure.
The world’s largest asset manager, with approximately $12.5 trillion in assets under management, has filed with the U.S. Securities and Exchange Commission (SEC) a Form S-1 to list the iShares Bitcoin Premium Income ETF.
The proposed fund would actively manage exposure to bitcoin, either directly or through shares of BlackRock’s existing iShares Bitcoin Trust (IBIT), while generating income by selling call options on that exposure.
This “covered call” approach is already common in equity-based income funds, and some fund managers have already applied it to the crypto market. Through a covered call strategy, the fund would generate income by selling a counterparty the right to buy its underlying at a fixed price.
The fund, which does not yet have a defined ticker or fee, would actively manage this covered call strategy and distribute the generated premiums to investors as income. The trade-off here is that it effectively trades upside potential for revenue.
Funds with similar strategies for generating income from options include the Roundhill Bitcoin Covered Call Strategy ETF (YBTC), the Amplify Bitcoin Max Income Covered Call ETF (BAGY), and the NEOS Bitcoin High Income ETF (BTCI).
Still, BlackRock’s entry stands out for its scale and ties to IBIT, already the dominant spot Bitcoin ETF with more than $69.7 billion in assets according to SoSoValue data. IBIT and other Bitcoin funds offered by BlackRock were so successful that they became the company’s primary source of revenue.
Some covered call ETFs tend to dilute net asset value (NAV) because they offer higher returns to investors, in part through return of capital. YBTC, for example, currently has a payout ratio of 35.87%, while BTCI lists its payout ratio as 27.25%. BAGY’s distribution rate is 37.1%.
Excluding distributions, which are often in the double digits given the volatility of the underlying asset, bitcoin-focused income ETFs have so far underperformed BTC, which is what they are often designed for given the higher yields offered.
Over the past 12 months, BTCI is down approximately 31.3%, while YBTC has lost 45% of its value, compared to 14% for the cryptocurrency. BAGY, launched at the end of April 2025, is down 25% since its debut.
