**BlackRock** submitted S-1 registration documents for the iShares Bitcoin (BTC) Premium Income ETF. This ETF aims to generate income through a systematic sale of call options linked primarily to the asset manager's spot Bitcoin ETF, IBIT, while tracking cryptocurrency prices.
What happened: New ETF application
Bloomberg ETF analyst **Eric Balchunas** announced this application on January 26 on X, stating that the commercial details have not yet been fully disclosed.
Baltuchnas wrote, "BlackRock has just filed the official S-1 for the iShares Bitcoin Premium Income ETF it will soon launch. There are no fees or tickers yet." He went on to explain, "The strategy is to provide premium income primarily by writing (selling) call options on IBIT stocks and occasionally ETP indices through an actively managed strategy that tracks the performance of Bitcoin prices."
This approach follows a covered call stock ETF structure that sells upside potential to monetize implied volatility. However, in this case, the options are based on the ETF wrapper rather than Bitcoin itself.
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Why it matters: Volatility pressure
Jake Ostrovskis, head of OTC trading at Wintermute, pointed out that this application adds another supply to an already crowded volatility selling environment.
He stated, "Since the launch of the ETF, SP, and IBIT options, BTC volatility has already been suffering from a significant excess supply." He added, "If more mechanical volatility selling is added to this, the logical outcome is that the yields obtainable from the premiums implied by the market will steadily decline."
Ostrovskis argued that extracting option premiums from Bitcoin exposure is becoming insufficient by merely taking short volatility positions and will increasingly rely on systematic execution and allocation capabilities.
He wrote, "Utilizing structured/timing and axes through OTC desks will become increasingly important for maximizing the returns on positions that could otherwise become dormant assets."
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