BlackRock has submitted a proposal for an iShares Bitcoin Premium Income ETF, which seeks to generate income by selling call options on its Bitcoin ETF shares. According to NS3.AI, this strategy aims to convert market volatility into distributable yield. The fund intends to sell calls on 25-35% of its assets, limiting Bitcoin's potential gains in exchange for premium income. However, as volatility decreases, the premium income might also compress. Experts caution that this extensive call selling could exert downward pressure on option premiums, potentially disadvantaging retail investors during Bitcoin price surges.

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