BlackRock Moves to Launch iShares Bitcoin Premium Income ETF

In order to provide investors with premium income that goes beyond spot price increases, BlackRock filed for a Bitcoin income ETF employing an options method.

According to a registration statement submitted to the SEC on Friday, BlackRock may soon launch its iShares Bitcoin Premium Income ETF.

The newly introduced ETF will monitor the “performance of the price of Bitcoin while providing premium income through an actively managed strategy of writing (selling) call options on IBIT shares and, from time to time, on indices that track spot bitcoin exchange-traded products (‘ETPs'), including [iShares Bitcoin Trust] (such indices, ‘ETP Indices'),” according to what the issuer stated in its SEC filing.

In actuality, this means that the fund generates income by selling options that grant other investors the opportunity to purchase its IBIT shares at a predetermined price. In addition to the fund's Bitcoin, IBIT shares, and cash, shares in the ETF will represent fractional beneficial interests in that income.

A representative for BlackRock told Decrypt that the company is unable to comment further on how the new fund would stack up against rivals or when it will reveal information regarding the new ETF's expense ratio.

BlackRock Moves to Launch iShares Bitcoin

Initial S-1 registrations sometimes exclude information about tickers, custodians, and management fees. However, a few comparable Bitcoin income or covered-call ETFs are now trading for the purpose of perspective.

Since its inception in October 2024, the NEOS Bitcoin High Income ETF has been traded on the Cboe BZX Exchange under the BTCI ticker. It managed assets valued at $1.09 billion as of Friday. BTCI's yearly expenditure ratio is roughly 0.99% of assets. This indicates that investors pay the fund's operational and management expenses with little less than 1% of their invested assets annually.

The Roundhill Bitcoin Covered Call Strategy ETF (YBTC) and YieldMax Bitcoin Option Income Strategy ETF (YBIT), which have $225 million and $74 million in assets under management, respectively, will be competitors of the new BlackRock fund.

In order to pay for the expenses of putting their option-writing approach into practice, actively managed ETFs, such as BTCI and the recently launched iShares offering, incur higher fees. Because a passive spot Bitcoin ETF, such as IBIT, does not engage in derivatives trading, time markets, or discretionary strategy decisions, it maintains lower operational expenses.

Compared to a passive spot Bitcoin ETF, the structure represents a higher-risk, higher-fee strategy with the possibility of higher income.