BlackRock is intensifying its foray into the cryptocurrency exchange-traded fund (ETF) sector by filing with the U.S. Securities and Exchange Commission (SEC) for the iShares Bitcoin Premium Income ETF. This move reflects the firm”s commitment to capitalize on the growing demand for bitcoin exposure, currently priced at $88,130.00.
As the largest asset manager globally, with approximately $12.5 trillion in assets under management, BlackRock aims to actively manage this new fund”s exposure to bitcoin. The strategy will involve either direct investment in bitcoin or through shares of BlackRock”s already established iShares Bitcoin Trust (IBIT). The fund will generate income by employing a covered-call strategy, an approach that is increasingly being utilized in both traditional finance and the cryptocurrency space.
Through this covered-call strategy, the fund will sell options to counterparties, granting them the right to purchase the underlying bitcoin at a predetermined price. The premiums collected from these options will be distributed to investors as income. This strategy, while potentially lucrative, involves a trade-off, as it may limit the fund”s upside potential in favor of generating consistent income.
BlackRock”s initiative stands out due to its scale and its association with the iShares Bitcoin Trust, which currently dominates the spot bitcoin ETF market with over $69.7 billion in assets, according to SoSoValue data. The success of IBIT and other bitcoin-related offerings from BlackRock has made them a significant revenue source for the firm.
In the landscape of income-focused bitcoin funds, BlackRock will be joining others like the Roundhill Bitcoin Covered Call Strategy ETF (YBTC), Amplify Bitcoin Max Income Covered Call ETF (BAGY), and NEOS Bitcoin High Income ETF (BTCI). These funds have employed similar strategies to deliver returns, although they may dilute net asset value (NAV) by offering higher yields, partially through capital returns.
Current distribution rates for comparable funds are noteworthy; YBTC boasts a rate of 35.87%, while BTCI offers 27.25%, and BAGY provides a distribution rate of 37.1%. Despite these attractive yields, performance metrics indicate that bitcoin-focused income ETFs have generally underperformed against BTC itself. In the past year, BTCI has seen a decline of approximately 31.3%, whereas YBTC has experienced a loss of 45%, contrasting with Bitcoin”s 14% decrease during the same period. BAGY, launched in late April 2025, is down 25% since its inception.
This strategic move by BlackRock highlights the growing intersection of traditional finance and digital assets, as institutional players seek to innovate in the ever-evolving cryptocurrency landscape.
