BlackRock chases Bitcoin yield in latest ETF as a ‘sequel’ to IBIT

Asset management giant BlackRock filed to register a Delaware trust company for its proposed Bitcoin Premium Income ETF on Thursday, signaling a push to broaden its Bitcoin offerings.

Bloomberg ETF analyst Eric Balchunas said BlackRock’s proposed product would sell covered call options on Bitcoin futures, collecting premiums to generate yield. 

The regular distributions would, however, trade away potential upside from investing in BlackRock’s spot Bitcoin ETF, which mirrors Bitcoin’s (BTC) price movements. 

“This is a covered call Bitcoin strategy in order to give BTC some yield. This will be a ’33 Act spot product, sequel to the $87b $IBIT.”

Registering a trust filing in Delaware typically indicates that an ETF issuer will imminently file an S-1 registration statement or 19b-4 filing with the Securities and Exchange Commission to officially kick off the process.

US regulators — particularly the SEC — have signaled openness to a wider range of crypto investment products as part of President Donald Trump’s promise to make America the “crypto capital of the world.”

The new BlackRock product would complement its iShares Bitcoin ETF (IBIT), which has clocked over $60.7 billion in inflows since launching in January 2024 — by far the largest of its kind — with the Fidelity Wise Origin Bitcoin Fund (FBTC) coming in next at $12.3 billion.

Bitcoin yield products are slowly coming to market

One of the earliest reasons why many TradFi investment companies overlooked Bitcoin is that it isn’t a native yield-generating asset.

However, solutions have popped up, such as one of Strategy’s convertible preferred stock offerings, STRK, which leverages its 639,835 Bitcoin to offer investors stable income.

Related: Bitcoin upgrade is splitting developers and purists

If approved, BlackRock’s proposed product would add to the few prominent yield-generating Bitcoin products in the US.

BlackRock won’t take part in altcoin ETF craze, analyst says

Balchunas said that, in light of all the other coins “about to be ETF-ized,” the filing shows BlackRock is opting to build around Bitcoin and Ether (ETH) and “lay off the rest, at least for now.”

“This makes the horse race for these other coins much more wide open,” he said.