BlackRock is about to give Bitcoin investors something Wall Street’s income-obsessed crowd has been waiting for: yield on their BTC exposure without selling the underlying asset.
The firm’s new iShares Bitcoin Premium Income ETF, trading under the ticker BITA, became effective on Friday after filing a Form 8-A with the SEC. Bloomberg ETF analyst Eric Balchunas expects trading to begin around Thursday, June 18.
How BITA actually works
BITA will hold shares of BlackRock’s iShares Bitcoin Trust ETF, known as IBIT, and sell call options against those holdings. The premiums collected from selling those options get distributed as income to BITA shareholders. You get exposure to Bitcoin’s price movements while also receiving regular income payments. The tradeoff is that your upside gets capped when Bitcoin rallies hard, because those call options you sold mean someone else captures the gains above the strike price.
Up to 35% of BITA’s holdings could be allocated to this options-writing activity.
