BlackRock looks to bring yield-generation to Bitcoin investments with iShares Bitcoin Premium Income ETF

BlackRock is looking to add to its range of bitcoin investment products with a new iShares Bitcoin Premium Income ETF, designed to provide direct bitcoin spot exposure while also generating yield, according to a Securities and Exchange Commission filing on Friday. 

Like BlackRock’s existing IBIT Bitcoin ETF, the new fund would track the price of bitcoin primarily by holding actual bitcoin. However, it will also generate income through an actively managed “covered-call” strategy.

To generate yield, the fund’s investment advisor will actively sell call options, primarily on IBIT shares, though sometimes on other Bitcoin-tracking ETP indices, capturing those option premiums as income.

The fund, which does not yet have a ticker, would add to the growing list of covered call crypto investment products, which essentially trade potential upside by agreeing to sell options at a fixed price for monthly income generation. 

It would also, in some sense, provide a yield mechanism for Bitcoin ETFs not unlike ETH or SOL funds, which instead generate income through staking. 

BlackRock’s Nasdaq-listed iShares Bitcoin ETF is the largest spot bitcoin fund, with about $69.75 billion in assets under management. IBIT and the fund’s other major crypto ETF, tracking Ethereum, are among the fastest-growing funds on record.