BlackRock ( BLK ) is moving deeper into the cryptocurrency exchange-traded fund (ETF) market with a plan to offer income from bitcoin exposure.
The world’s largest asset manager, with an estimated $12.5 trillion in assets under management, filed with the US Securities and Exchange Commission (SEC) a Form S-1 to list the iShares Bitcoin Premium Income ETF.
The proposed fund will actively manage exposure to bitcoin, either directly or through shares in BlackRock’s existing iShares Bitcoin Trust (IBIT), while generating income by selling call options on that exposure.
This “covered-call” approach is already common in equity income funds, and some fund managers have already applied it to the crypto market. Through a covered-call strategy, the fund would generate income by selling a counterparty the right to buy its underlying at a fixed price.
The fund, which does not yet have a ticker or fee defined, will actively manage this covered call strategy and distribute the premiums generated to investors as income. The trade-off here is that it effectively trades potential upside for income.
Funds with similar options-generating strategies 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, already the dominant spot bitcoin ETF with over $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 biggest source of revenue.
Some ETFs with covered calls tend to dilute net asset value (NAV) as they offer higher returns to investors, in part through the 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 at 27.25%. BAGY’s distribution rate is 37.1%.
Excluding distributions, which are often in the double digits given the underlying asset’s volatility, bitcoin-focused income ETFs have so far underperformed BTC, something they are often designed to do given the higher yields on offer.
Over the past 12-month period, BTCI has fallen by around 31.3%, while YBTC lost 45% of its value compared to the cryptocurrency’s 14% move. Launched in late April 2025, BAGY has fallen 25% since its debut.
