BlackRock is launching the iShares Bitcoin Premium Income ETF, utilizing a covered call strategy on Bitcoin. The ETF aims to provide exposure to Bitcoin with less volatility and generate monthly premium income. Managed by BlackRock, Coinbase, and BNY Mellon, the fund offers institutional-level safety in the crypto space.

The new Bitcoin ETF from BlackRock holds actual Bitcoin in cold storage by Coinbase Custody while selling call options on the iShares Bitcoin Trust. This strategy aims to provide investors with exposure to Bitcoin while generating income through monthly premiums. While offering custodial safety and monthly yield, the fund also caps gains if Bitcoin experiences significant price increases.

BlackRock’s filing for the Bitcoin ETF suggests a shift towards taming the extreme volatility of cryptocurrencies, targeting registered investment advisors looking for a more stable investment option. This move signals the maturation of Bitcoin into a traditional asset class, offering retirees and income-seekers a less risky way to invest in the cryptocurrency.

The launch of BlackRock’s iShares Bitcoin Premium Income ETF signals a shift towards a more traditional approach to investing in Bitcoin, offering a covered call strategy to reduce volatility and generate monthly income. While providing a sense of legitimacy, the fund may face challenges during market downturns, making it essential to consider hedging strategies for downside protection.

Read more at Yahoo Finance: BlackRock’s New Covered Call Bitcoin ETF Is Another Red Flag for a Dangerous Investing Trend