BlackRock just made it possible to earn yield on Bitcoin without touching DeFi, staking protocols, or anything that requires a MetaMask wallet. The firm’s new iShares Bitcoin Premium Income ETF, trading under the ticker BITA, began trading on Nasdaq on June 16, marking the first major yield-focused Bitcoin ETF from a heavyweight asset manager.
The product targets an annual yield of 15% to 25%. BlackRock is generating monthly income for investors by selling call options against its own flagship spot Bitcoin ETF, IBIT.
How BITA actually works
BITA holds shares of BlackRock’s spot Bitcoin ETF, IBIT, and writes call options against roughly 25% to 35% of the fund’s net asset value each month. Those options premiums become the income that flows to investors as monthly distributions.
When Bitcoin rips higher, BITA investors will capture less of that upside because the call options effectively cap gains on the portion of holdings used for writing contracts. In exchange, they get a more predictable income stream and potentially lower volatility compared to holding spot Bitcoin directly.
