Grayscale Unveils Two Bitcoin ETFs Leveraging Volatility for Income Generation
Grayscale has launched two new exchange-traded funds (ETFs) on the New York Stock Exchange, offering investors a fresh way to earn income from bitcoin’s famously volatile price movements. Both funds are scheduled to begin trading on Wednesday.
The two products—the Bitcoin Covered Call ETF (BTCC) and the Bitcoin Premium Income ETF (BPI)—are designed around a covered call strategy. This involves selling call options, a type of financial derivative that gives buyers the right to purchase an asset at a specific price before a set expiry date. The seller earns a premium from this transaction, which can serve as a source of income.
BTCC is aimed at generating consistent cash flow by writing call options close to bitcoin’s spot price. This proximity potentially allows for steady income while providing a slight buffer against sharp market declines.
BPI, on the other hand, is structured for investors who still want to capture a portion of bitcoin’s upside. It writes call options that are significantly out-of-the-money—meaning the strike price is much higher than the current market price. This approach may allow holders to gain exposure to BTC’s potential rallies while collecting modest income through option premiums.
Both ETFs will use options based on other bitcoin-focused ETFs, including Grayscale’s own Bitcoin Trust (GBTC) and Bitcoin Mini Trust (BTC).
Even with a surge in institutional interest following the approval of spot bitcoin ETFs in early 2024, the asset’s volatility remains pronounced. Bitcoin rose 48% in Q4 2024, only to drop 12% in the first quarter of 2025—a historically strong period for crypto. For comparison, the cryptocurrency had gained 72% and 69% in the first quarters of 2023 and 2024, respectively, according to Coinglass.
Given this rollercoaster behavior, Grayscale’s new offerings may appeal to institutions looking for more sophisticated strategies—ones that can generate returns even when bitcoin’s price fluctuates unpredictably.
