BlackRock expands its bitcoin fund lineup with a new income-oriented filing

BlackRock Expands Its Presence in Crypto ETFs with New Bitcoin Income Fund

BlackRock, the world’s largest asset management firm overseeing approximately $12.5 trillion, is making further moves into the cryptocurrency ETF sector by introducing a product designed to provide income from bitcoin exposure.

The company has submitted a Form S-1 to the U.S. Securities and Exchange Commission, seeking approval to launch the iShares Bitcoin Premium Income ETF.

This new ETF would take an active approach to managing bitcoin exposure, either by holding bitcoin directly or through shares of BlackRock’s existing iShares Bitcoin Trust (IBIT). The fund aims to generate income by selling call options on its bitcoin holdings.

The strategy, known as a “covered-call,” is already popular among equity income funds and has been adapted by some managers for the crypto space. By selling call options, the fund earns premiums from counterparties who gain the right to purchase its underlying assets at a predetermined price.

Although the ETF’s ticker and fee structure have not yet been announced, the fund would actively oversee this options-based strategy and distribute the resulting premiums to investors as income. This approach typically sacrifices some potential gains in exchange for regular income.

Other funds employing similar options-based income strategies include the Roundhill Bitcoin Covered Call Strategy ETF (YBTC), Amplify Bitcoin Max Income Covered Call ETF (BAGY), and NEOS Bitcoin High Income ETF (BTCI).

BlackRock’s initiative is notable due to its significant scale and its connection to IBIT, which is already the leading spot bitcoin ETF with assets exceeding $69.7 billion. BlackRock’s bitcoin funds, including IBIT, have become major revenue drivers for the firm, as highlighted in a recent report.

Performance and Yield Considerations

Covered-call ETFs often provide higher yields, sometimes by returning capital to investors, which can reduce the fund’s net asset value (NAV). For instance, YBTC currently offers a 35.87% distribution rate, BTCI distributes at 27.25%, and BAGY’s rate stands at 37.1%.

Despite their attractive yields—often in the double digits due to the volatility of bitcoin—these income-focused ETFs have generally lagged behind the performance of bitcoin itself, which is an expected outcome given their income-oriented design.

• BTCI has declined by about 31.3% over the past year.
• YBTC has seen a 45% drop in value during the same period, while bitcoin itself fell by 14%.
• BAGY, which began trading in late April 2025, is down 25% since its launch.