- Grayscale has unveiled the Grayscale Bitcoin Covered Call ETF and the Grayscale Bitcoin Premium Income ETF.
- These ETFs are designed to offer investors dividend income by utilizing call options linked to Bitcoin ETFs.
- The launch comes in the wake of Bitcoin’s sideways trading pattern over the past several weeks amidst tariff announcements from President Trump.
In a news release on Wednesday, the firm revealed its new Bitcoin options-based ETFs: the Grayscale Bitcoin Covered Call ETF (BTCC) and the Grayscale Bitcoin Premium Income ETF (BPI).
The aim of these funds is to provide dividend income to investors through call-writing strategies built around the company’s current Bitcoin ETF offerings.
BTCC will concentrate on generating income by writing or selling call options at strike prices that align closely with Bitcoin’s current market price. Rather than depending on the potential for Bitcoin’s price appreciation, the fund generates revenue by collecting option premiums, which are then distributed to investors. These premiums could also provide a buffer against losses during market slumps, though the opportunity for significant gains is capped if Bitcoin’s price exceeds the option’s strike price.
“By selling calls near market prices, BTCC aims to maintain a primary focus on income generation,” the company noted. “This positions BTCC as an income-first strategy, potentially attractive for investors seeking consistent cash flows and high-yield opportunities.”
Conversely, BPI is oriented towards offering investors substantial upside potential for capital appreciation while providing lower levels of dividend income. Therefore, the fund specializes in selling calls with strike prices set well above Bitcoin’s current price.
“This dual approach gives investors a chance to engage in Bitcoin’s capital appreciation potential while still reaping some income benefits,” the company added.
Bitcoin remains stagnant as Trump’s tariffs instigate a risk-off atmosphere
The introduction of BTCC and BPI may have been influenced by Bitcoin’s recent sideways movement, following President Donald Trump’s tariffs on foreign trading partners.
On Wednesday, Trump is expected to announce 25% tariffs on imports from Mexico and Canada, along with reciprocal tariffs affecting all international trading counterparts as part of what he refers to as “Liberation Day.”
Investors are gravitating towards risk-averse strategies, as indicated by sluggish flows into crypto ETFs and Bitcoin’s inability to break above the $90,000 mark in the last month. The Crypto Fear and Greed Index has consistently remained below 50 for over a month, signaling heightened concern among investors.