BlackRock is expanding its footprint in crypto ETFs with a proposal to launch a bitcoin-linked fund designed to generate income through options strategies.
The asset management giant, which oversees roughly $12.5 trillion in assets, has filed a Form S-1 with the U.S. Securities and Exchange Commission seeking approval to list the iShares Bitcoin Premium Income ETF. The fund aims to offer investors income while retaining exposure to bitcoin.
According to the filing, the ETF would actively manage bitcoin exposure either directly or via holdings in BlackRock’s iShares Bitcoin Trust (IBIT). Income would be generated by selling call options against that exposure, a strategy commonly known as covered calls. By selling options that give counterparties the right to buy bitcoin at a predetermined price, the fund would collect premiums that are then distributed to investors.
Covered-call strategies are widely used in equity income funds and have already made their way into crypto markets through several existing products. However, BlackRock’s entry is notable given its scale 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. Bitcoin ETFs have become a major revenue driver for the firm following their rapid adoption.
The proposed ETF has not yet announced a ticker symbol or expense ratio. It would actively manage its options strategy and pay out option premiums as income, a structure that typically sacrifices some upside potential in exchange for yield.
Comparable bitcoin income ETFs include 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 funds often advertise high distribution rates, those payouts can come at the expense of net asset value, in part through returns of capital. YBTC currently reports a distribution rate of 35.87%, while BTCI and BAGY stand at 27.25% and 37.1%, respectively.
Performance has also lagged the underlying asset. Over the past year, BTCI has fallen about 31.3% and YBTC has dropped 45%, compared with bitcoin’s roughly 14% decline over the same period. BAGY, which launched in late April 2025, is down about 25% since inception.
