BlackRock has filed for a new Bitcoin ETF that combines price exposure with income generation through options trading.
Quick Summary – TLDR:
- BlackRock filed an S-1 form with the SEC to launch the iShares Bitcoin Premium Income ETF.
- The ETF aims to generate income by actively selling call options on IBIT shares and ETP indices.
- This strategy offers higher yields but potentially limits upside performance.
- The fund will compete with other Bitcoin income ETFs like BTCI, YBTC, and BAGY.
What Happened?
BlackRock, the world’s largest asset manager, has filed for a new exchange-traded fund designed to offer income from Bitcoin exposure. The iShares Bitcoin Premium Income ETF will use an actively managed covered-call strategy involving the sale of call options on shares of the existing iShares Bitcoin Trust (IBIT) and other spot Bitcoin indices. The fund is still awaiting regulatory approval and has yet to disclose its ticker symbol or fee structure.
BlackRock just filed for the iShares Bitcoin Premium Income ETF, blending BTC exposure with monthly yield from covered calls on its massive IBIT fund. pic.twitter.com/zxadHR7956
— TFTC (@TFTC21) January 26, 2026
BlackRock Dives Deeper into Crypto ETFs
The iShares Bitcoin Premium Income ETF filing was made with the U.S. Securities and Exchange Commission on January 23, 2026. This is part of BlackRock’s continued efforts to strengthen its presence in the cryptocurrency ETF space after the success of IBIT, which now holds more than $69.7 billion in assets.
The fund’s strategy combines two components:
- Tracking the price of Bitcoin through IBIT and, occasionally, other spot Bitcoin ETP indices.
- Generating income by selling call options, allowing the fund to collect premiums from investors betting on Bitcoin’s future price.
These option premiums are then distributed to ETF investors as income. However, the tradeoff is reduced potential for capital gains since call options cap upside returns.
Competing in a Crowded Market
This type of ETF is not the first of its kind. Several similar Bitcoin income ETFs already exist, such as:
- NEOS Bitcoin High Income ETF (BTCI) with $1.09 billion in assets and a 0.99% annual fee.
- Roundhill Bitcoin Covered Call Strategy ETF (YBTC) with $225 million in assets.
- YieldMax Bitcoin Option Income Strategy ETF (YBIT) with $74 million under management.
- Amplify Bitcoin Max Income Covered Call ETF (BAGY) launched in April 2025.
While these ETFs promise higher income through aggressive distribution strategies, their performance often lags behind Bitcoin due to the limitations of covered-call strategies. For instance:
- BTCI has dropped 31.3% in the last 12 months.
- YBTC is down 45%.
- BAGY is down 25% since its April 2025 debut.
Despite these numbers, some investors are drawn to the double-digit distribution yields, such as 35.87% for YBTC and 27.25% for BTCI, due to the high volatility of the underlying asset.
A Strategic Play from BlackRock
Unlike its competitors, BlackRock’s scale and dominance in the ETF space may give this new offering an edge. The existing IBIT fund is already the largest spot Bitcoin ETF and one of the firm’s top revenue drivers. The addition of an income-generating fund tied to IBIT could appeal to a broader investor base looking for regular returns rather than just long-term capital appreciation.
SQ Magazine Takeaway
I think this move from BlackRock is pretty smart. They are not just jumping on the crypto bandwagon. They’re building financial tools that cater to different investor appetites. Not everyone wants the wild ride of Bitcoin price swings. Some folks prefer steady income, and this ETF might just be the kind of product they’re looking for. The covered call strategy does come with tradeoffs, especially on potential upside, but for income-seeking investors, it could be a solid play. BlackRock is clearly serious about crypto and is using its muscle to shape the market.
