BlackRock’s iShares Bitcoin covered call ETF BITA launches on Nasdaq
The new BlackRock fund combines spot bitcoin and IBIT exposure with call-option writing on part of its holdings to generate monthly income while retaining most upside participation.
BlackRock has launched the iShares Bitcoin Premium Income ETF, ticker BITA, on Nasdaq, adding an income-oriented product to its bitcoin ETF lineup. The fund holds spot bitcoin and shares of the iShares Bitcoin Trust ETF while selling call options on roughly 25% to 35% of its IBIT holdings, with option premiums distributed monthly to investors. BlackRock said the structure is designed to preserve most bitcoin exposure while creating cash flow for investors seeking income. Robert Mitchnick, Head of Digital Assets at BlackRock, said the product was built for clients interested in bitcoin but focused on income generation. Jay Jacobs, BlackRock’s U.S. head of equity ETFs, said the fund is aimed at income-focused investors, long-term bitcoin holders seeking cash flow and investors who have avoided bitcoin or gold because they do not generate income. BITA gains exposure through direct spot BTC holdings and IBIT, which BlackRock described as the world’s largest bitcoin ETP with nearly $49 billion in assets since its January 2024 debut. BlackRock said IBIT’s options market averages $3.7 billion in daily trading volume, a scale it sees as important for executing the strategy. The fund charges a 0.65% sponsorship fee and uses a structure that BlackRock said may offer favorable tax treatment on option income through Section 1256 contracts.
- covered call: An options strategy that generates income by selling call options against an asset that is already owned, usually limiting some upside if the asset rises sharply.
- Section 1256 contracts: Certain regulated options and futures contracts that receive U.S. tax treatment in which gains and losses are split between long-term and short-term capital gains.
- bitcoin ETP: An exchange-traded product that gives investors market exposure to bitcoin through a listed security.