BlackRock files for ETF that offers monthly income with exposure to Bitcoin
BlackRock, through its arm iShares, has filed a registration statement (S-1) with the U.S. Securities and Exchange Commission (SEC) to launch a new fund called the iShares Bitcoin Premium Income ETF.
The fund aims to provide investors with exposure to Bitcoin price movements while offering enhanced monthly income through a strategy known as a Covered Call.
According to the disclosure, the fund will be structured as a Delaware statutory trust and will hold Bitcoin along with shares of the iShares Bitcoin Trust ETF (IBIT) and cash, including the returns generated from options activity.
The basic idea is to combine exposure to Bitcoin's price with recurring income based on selling call options against the held assets.
The income target will be achieved through active management of the Covered Call strategy, where the fund primarily writes call options on IBIT shares and sometimes on indices related to traded spot Bitcoin ETPs.
This approach typically enhances income from options premiums but may limit some of the gains from rapid price increases.
In terms of custody and management, Coinbase Custody Trust Company will act as the Bitcoin custodian, with Anchorage Digital Bank as an alternative option.
