BlackRock is advancing its expansion into crypto ETFs with plans for a bitcoin-linked income fund that uses options strategies to generate yield.
The world’s largest asset manager, which oversees roughly $12.5 trillion in assets, has submitted a Form S-1 to the U.S. Securities and Exchange Commission seeking approval to list the iShares Bitcoin Premium Income ETF. The proposed product aims to deliver income while maintaining exposure to bitcoin.
Under the filing, the fund would actively manage its bitcoin exposure either directly or through shares of BlackRock’s iShares Bitcoin Trust (IBIT). To produce income, the ETF would sell call options on that exposure, employing a covered-call strategy that allows the fund to collect option premiums while capping some upside potential.
Covered-call strategies are widely used in equity income funds and have already gained traction in crypto-focused ETFs. BlackRock’s move is notable given the scale of its platform and the prominence of IBIT, which has grown into the largest spot bitcoin ETF with more than $69.7 billion in assets, according to SoSoValue. The firm’s bitcoin ETF lineup has quickly become a meaningful source of revenue.
Key details such as the fund’s ticker symbol and expense ratio have not yet been disclosed. The ETF would actively manage its options positions and distribute the collected premiums to investors as income, a structure that typically trades capital appreciation for yield.
Several bitcoin income ETFs already use similar approaches, including 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). While these products often advertise high distribution rates, those payouts can dilute net asset value, sometimes through returns of capital. YBTC currently shows a 35.87% distribution rate, while BTCI and BAGY report rates of 27.25% and 37.1%, respectively.
So far, performance has lagged the underlying asset. Over the past 12 months, BTCI is down roughly 31.3% and YBTC has fallen 45%, compared with bitcoin’s approximately 14% decline. BAGY, which launched in late April 2025, has dropped about 25% since its debut.
