BlackRock (BLK) is moving deeper into the cryptocurrency exchange-traded fund (ETF) market with a plan to offer bitcoin income exposure.
The world’s largest asset manager, with an estimated $12.5 trillion in assets under management, 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 bitcoin exposure, 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 buy” approach is already common in equity-based income funds, and some fund managers have already applied it to the cryptocurrency market. Through a covered call strategy, the fund would generate income by selling to a counterparty the right to buy its underlying at a fixed price.
The fund, which does not yet have a ticker or fee defined, would actively manage this purchase hedging strategy and distribute the premiums generated to investors as income. The trade-off here is that you effectively trade potential advantages for income.
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, which is 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 have been so successful that they have become the company’s main source of income.
Some covered option ETFs tend to dilute net asset value (NAV) as they offer higher returns to investors, in part through return of capital. YBTC, for example, currently shows that it has a distribution rate of 35.87%, while BTCI shows that its distribution rate is 27.25%. BAGY’s distribution rate is 37.1%.
Excluding distributions, which are often in double digits given the volatility of the underlying asset, bitcoin-focused income ETFs have so far underperformed BTC, something they are often designed to do given the higher yields offered.
Over the past 12-month period, BTCI is down around 31.3%, while YBTC lost 45% of its value, compared to the cryptocurrency’s 14% drop. BAGY, which launched in late April 2025, is down 25% since its debut.
