Grayscale Launches New Bitcoin ETFs Offering Income Strategies
Crypto asset management firm Grayscale has introduced two innovative exchange-traded funds (ETFs) aimed at providing investors with unique income opportunities, leveraging the inherent volatility of Bitcoin (BTC). These new funds, listed on the New York Stock Exchange, are set to commence trading on Wednesday.
The two ETFs are the Bitcoin Covered Call ETF (BTCC) and the Bitcoin Premium Income ETF (BPI). Both funds employ covered call writing strategies, which involve the sale of call options to generate income based on the premiums received. Call options are financial derivatives that speculate on the increasing price of an asset, granting the holder the right, but not the obligation, to purchase the asset at a specified price within a defined timeframe.
BTCC is designed to write calls that are closely aligned with the spot price of Bitcoin, thereby delivering income for investors who seek consistent cash flow. The premiums from these options may also provide a buffer against potential market downturns. In contrast, BPI will focus on options with strike prices that are significantly out-of-the-money, meaning the strike price is much higher than the current spot price. This strategy allows investors to capture much of BTC’s upward potential while also possibly benefiting from some dividend income, as highlighted in an announcement from Grayscale on Wednesday.
The options contracts utilized by both ETFs will track other Bitcoin ETFs, including Grayscale’s own Bitcoin Trust (GBTC) and Bitcoin Mini Trust (BTC). Despite the notable increase in institutional investments in Bitcoin through spot ETFs since their introduction in January 2024, Bitcoin’s volatility is likely to persist in the near future. After experiencing a nearly 48% increase in the fourth quarter, the leading cryptocurrency began 2025 with a notable 12% decline, even during a historically bullish first quarter. In comparison, Bitcoin saw gains of 72% and 69% in the first quarters of 2023 and 2024, respectively, according to data from Coinglass.
As institutional investors continue to enhance their exposure to Bitcoin, the demand for products like Grayscale’s ETFs, which offer alternative sources of income to help mitigate volatility, is expected to grow.
