Grayscale, a prominent crypto asset manager, has introduced two new exchange-traded funds (ETFs) designed to provide investors with unique income opportunities stemming from the inherent volatility of bitcoin (BTC).
The newly listed funds on the New York Stock Exchange are set to commence trading on Wednesday.
The Bitcoin Covered Call ETF (BTCC) and Bitcoin Premium Income ETF (BPI) utilize covered call writing strategies, a method that involves selling call options to earn income from the premiums received.
Call options are derivative contracts that speculate on the price increase of an asset, granting the holder the right, but not the obligation, to purchase the asset at a set price within a specified timeframe.
BTCC aims to write calls that are closely aligned with spot prices, providing income for investors looking for consistent cash flow, while potentially offering a safety net against market declines through the options premiums.
On the other hand, BPI will focus on options with strike prices significantly above the current spot price, enabling investors to benefit from much of BTC’s upside potential while possibly reaping some dividend income, as highlighted in an email from Grayscale on Wednesday.
The options contracts utilized by both ETFs will be linked to other bitcoin ETFs, including Grayscale’s Bitcoin Trust (GBTC) and Bitcoin Mini Trust (BTC).
Despite a significant uptick in institutional investments in BTC since the launch of spot ETFs in January 2024, the volatility of bitcoin continues unabated.
After surging nearly 48% in the fourth quarter, bitcoin started 2025 on a downturn, losing 12% during what is typically a strong first quarter. Notably, the cryptocurrency experienced rises of 72% and 69% in the first quarters of 2023 and 2024, respectively, according to data from Coinglass.
As institutional investors expand their exposure to bitcoin, the demand for products like Grayscale’s, which provide alternative income sources to mitigate against volatility, is likely to grow.
