BlackRock (BLK) is diving deeper into the cryptocurrency exchange-traded fund (ETF) market with plans to offer Bitcoin income touch.
The world’s largest asset manager, with approximately $12.5 trillion in assets under management, has filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) listing the iShares Bitcoin Premium Income ETF.
The proposed fund would actively manage Bitcoin exposure, either directly or through BlackRock’s existing iShares Bitcoin Trust (IBIT) shares, while generating income by selling call options on that exposure.
This “covered call” approach is already common among equity income funds, and some fund managers have applied it to the cryptocurrency market. Through a covered call strategy, the fund will generate income by selling a counterparty the right to purchase its underlying asset at a fixed price.
The fund, which has not yet defined a ticker or fee, will actively manage this covered call strategy and distribute the resulting premium to investors as income. The trade-off here is that it effectively trades potential upside for revenue.
Funds that use similar strategies to generate income from options include Roundhill Bitcoin Covered Call Strategy ETF (YBTC), Amplify Bitcoin Max Income Covered Call ETF (BAGY) and NEOS Bitcoin High Income ETF (BTCI).
Still, BlackRock’s entry stands out for its size and ties to IBIT, which is already the dominant Bitcoin spot ETF with more than $69.7 billion in assets, according to SoSoValue. IBIT and other Bitcoin funds offered by BlackRock have been so successful that they have become the company’s largest source of revenue.
Some covered call ETFs tend to be dilutive to net asset value (NAV) because they offer investors higher yields (in part through capital returns). For example, YBTC currently shows its allocation rate at 35.87%, while BTCI shows its allocation rate at 27.25%. BAGY’s distribution rate is 37.1%.
Allocations are often in the double digits given the volatility of the underlying asset, but Bitcoin-focused income ETFs have so far underperformed BTC, which is what they are typically designed to do given the higher yields on offer.
Over the past 12 months, BTCI has lost approximately 31.3%, while YBTC has lost 45% of its value, while the cryptocurrency has lost 14% in value. BAGY launched in late April 2025 and has fallen 25% since listing.