BlackRock, the world’s largest asset manager with more than $10 trillion under management, has launched a new Bitcoin exchange-traded product designed to generate monthly income for investors — a move the firm’s top ETF executive says is aimed at pulling in a wave of traditional investors who have kept their distance from the asset due to its volatility.
Jay Jacobs, BlackRock’s US Head of Equity ETFs, spoke to CoinTelegraph to discuss the launch of the iShares Bitcoin Premium Income ETF, ticker BITA, which began trading this week. The product represents a departure from conventional Bitcoin exposure by layering a covered-call strategy on top of the firm’s existing iShares Bitcoin Trust, known as IBIT.
“You can think about this as a hybrid strategy for investors,” Jacobs said. “You both have upside opportunity in Bitcoin, as well as the ability to generate income off of Bitcoin.”
BITA holds exposure to Bitcoin through IBIT and sells call options at the money on approximately 25 to 35% of the portfolio. The premium collected from the sale of those options is distributed to holders as income.
Jacobs said the strategy targets an annual yield of between 15 and 25%, though the actual figure will depend on Bitcoin’s volatility at any given time — a direct application of the Black-Scholes options pricing model, where higher volatility produces higher premiums.
