Key facts
- BlackRock is nearing the launch of its iShares Bitcoin Premium Income ETF (BITA).
- The ETF will generate income by selling call options on a portion of its Bitcoin holdings.
- BITA will hold Bitcoin, cash, and shares of BlackRock's existing spot Bitcoin ETF, IBIT.
- The fund's sponsor fee is set at 0.65%, lower than competing covered-call Bitcoin ETFs.
- Coinbase will act as the custodian for BITA's Bitcoin assets.
BlackRock is accelerating preparations for its iShares Bitcoin Premium Income ETF, set to trade under the ticker BITA on Nasdaq. This move follows the significant success of its spot Bitcoin ETF, IBIT, which has amassed over $49 billion in assets since its January 2024 launch. The new BITA ETF aims to transform Bitcoin into an income-generating asset by employing a covered-call strategy. The fund will hold a mix of Bitcoin, cash, and shares of IBIT, allowing it to sell call options primarily on IBIT shares. The premiums collected from selling these options will be distributed to investors as income, particularly effective in sideways or flat markets. However, this strategy caps potential upside if Bitcoin experiences sharp price rallies. Coinbase will serve as the institutional custodian for BITA's Bitcoin holdings, mirroring the arrangement for IBIT. BlackRock has set a sponsor fee of 0.65% for BITA, which is lower than existing covered-call Bitcoin ETFs like YBTC (0.95%) and BTCI (0.99%). ETF expert Eric Balchunas anticipates the fund's launch within weeks, noting BlackRock's competitive pressure to debut before Goldman Sachs' similar offering. The fund has reportedly been seeded and has begun acquiring its underlying assets, signaling an imminent launch.