BlackRock Files for a Bitcoin Income ETF That Sells Options for Yield

When investors think of ways to generate yield, they typically turn to fixed income—including corporate and municipal bonds, Treasury bills, CDs and annuities—or the equities market. 

But with interest rates having fallen substantially over the past two years, debt securities no longer offer the same appeal to income-focused investors that they once did. 

As a result, sectors historically associated with strong dividends—such as utilities, energy, and real estate—have seen notable inflows as the rotation out of fixed income continues. But soon, income investors will have another option: a premium income exchange-traded fund (ETF) with exposure to crypto. 

The Issue With Crypto Exposure Via Traditional Equity Markets

Prior to 2024, if investors wanted exposure to crypto such as Bitcoin (BTC) and Ethereum (ETH), they had to navigate the often convoluted decentralized finance—or DeFi—landscape, replete with its esoteric terminology, including hard and soft forks, cold and hot wallets, tokenization, halving, and staking. 

That all changed when the U.S. Securities and Exchange Commission (SEC) approved the first 11 spot Bitcoin ETFs on Jan. 10, 2024, providing investors who were uncomfortable with DeFi but familiar with traditional equity markets the chance to gain exposure to crypto.

Since then, ETF demand has accelerated, and in 2025, BTC and ETH funds added more than $32 billion.

But one inherent issue with crypto—or crypto ETFs, for that matter—is that, like gold and silver, in and of itself the asset class does not produce yield. And while some coins and tokens offer passive income via staking, in digital currencies, that is more the exception than the rule.  

However, one financial services firm is planning on leveraging crypto through traditional equity markets to enable investors to generate income courtesy of Bitcoin, the largest crypto by market cap at about $1.5 trillion. 

BlackRock’s Premium Bitcoin Income ETF Solution

BlackRock (NYSE: BLK) has taken the next step in bridging the divide between traditional equity income investors and crypto markets. 

On Jan. 23, the company filed an SEC Form S-1 registration for the iShares Bitcoin Premium Income ETF. A launch could follow in the near term, but the fund remains subject to SEC review and regulatory approval. And while it will not be the first fund to lean on crypto for income generation, the ETF will join just a handful of other options in the nascent but growing space that uses covered call strategies to produce yield.   

In essence, BlackRock is creating a product that, fundamentally, operates the same way as the extremely popular dividend-focused JPMorgan Equity Premium Income ETF (NYSEARCA: JEPI) or the NEOS S&P 500 High Income ETF (BATS: SPYI). 

The major difference is that, according to BlackRock’s SEC filing, the forthcoming fund will track the "performance of the price of Bitcoin while providing premium income through an actively managed strategy of writing (selling) call options on IBIT shares and, from time to time, on indices that track spot bitcoin exchange-traded products ('ETPs'), including [iShares Bitcoin Trust] (such indices, 'ETP Indices')." 

BlackRock’s iShares Bitcoin Trust ETF (NASDAQ: IBIT) will be the ETP from which the call options are written. The passively managed fund, which tracks the spot price of Bitcoin, was launched on Jan. 5, 2024. Since then, it has amassed more than $64 billion in assets under management and is now the largest Bitcoin spot ETF on the market.

A Reminder About Risk Tolerance

In essence, the fund will aim to capture Bitcoin’s enormous potential upside and translate that into shareholder gains via yield. But that comes with notable risks.

In its Form S-1 filing, BlackRock noted that—similar to the crypto market itself—“the trading prices of many digital assets, including Bitcoin, have experienced extreme volatility in recent periods,” adding that “extreme volatility in the future, including further declines in the trading prices of Bitcoin, could have a material adverse effect on the value of the shares.” 

Regulatory ambiguity is another risk factor. BlackRock’s filing highlighted how “digital asset markets in the United States exist in a state of regulatory uncertainty, and adverse legislative or regulatory developments could significantly harm the value of Bitcoin or the shares.”

Because income investors traditionally have lower risk tolerances, this fund may not be an ideal fit for all of them. Many income investors are focused on retirement, with the goal of maintaining their lifestyles while preserving their nest eggs. 

Conversely, crypto markets are notoriously volatile, so prospective shareholders should conduct thorough due diligence to see how BlackRock’s Bitcoin income ETF could fit in an otherwise lower-volatility, dividend-focused portfolio.

Where Should You Invest $1,000 Right Now?

Before you make your next trade, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.

Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.

They believe these five stocks are the five best companies for investors to buy now...

See The Five Stocks Here

The article "BlackRock Files for a Bitcoin Income ETF That Sells Options for Yield" first appeared on MarketBeat.