With an administration closely engaged with the cryptocurrency landscape, bitcoin is gaining increasing attention from investors. For those seeking income through bitcoin, the NEOS Bitcoin High Income ETF (BTCI) continues to deliver impressive distribution rates nearly four months post-launch.
The current presidential administration is fulfilling its campaign promises with a favorable approach to the crypto economy. David Sacks, the A.I. and crypto czar, recently disclosed plans to establish regulations on cryptocurrency this year, according to a report by CNBC.
“They are very committed to advancing legislation through the House and the Senate this year to provide the clear regulatory framework that the digital assets ecosystem requires to foster innovation in the United States,” Sacks mentioned in a recent CNBC interview. “Moving legislation through Congress can be time-consuming, but I believe we could achieve this in the next six months.”
See also: “Advisors Look to Income Plays in Bitcoin This Year”
The shift in administrative sentiment towards supporting the digital economy could act as a tailwind for digital assets in the future. Investors considering bitcoin as an opportunity should take a closer look at the NEOS Bitcoin High Income ETF (BTCI). Launched last October, this actively managed fund aims to produce monthly income through a covered call strategy while providing exposure to spot bitcoin via exchange-traded products. The ETPs in which the fund invests hold BTC and track its price performance before accounting for fees and expenses.
As of January 31, 2025, BTCI offers a distribution rate of 29.50%. This rate annualizes the most recent distribution divided by the fund’s NAV.
The fund allocates resources to bitcoin futures ETFs and options contracts that utilize BTC futures ETFs as their reference asset. This structure creates synthetic exposure to BTC through its futures while simultaneously writing covered call options on BTC futures ETFs to generate significant monthly income. The strategy employs a systematic, proprietary model to establish its options positions.
Covered call options involve purchasing an asset while also writing a call option on that asset. This approach generates a premium but also limits potential upside if the underlying asset appreciates. Options strategies, like that of BTCI, often benefit from market volatility, allowing for higher premiums and thus increased income when volatility rises. Given the heightened volatility of bitcoin, it may serve as an attractive avenue for generating additional income for BTC investors.
The fund managers might also engage in tax-loss harvesting to capture losses that can offset gains.
BTCI has an expense ratio of 0.98%.
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