Asset management giant BlackRock has applied to form a Delaware trust company linked to its proposed Bitcoin Premium Income ETF.
The filing suggests the firm is preparing to add another cryptocurrency product alongside its record-breaking iShares Bitcoin Trust (IBIT).
Covered Call Strategy for Bitcoin
Unlike its flagship iShares Bitcoin Trust, which tracks Bitcoin’s price directly, the new ETF would operate differently. It plans to sell covered call options on Bitcoin futures.
This strategy allows the fund to collect premiums, generating income that can be distributed to investors. The trade-off is that the fund gives up part of the potential upside if Bitcoin’s price rises sharply.
In a post on X, Bloomberg ETF analyst Eric Balchunas described the move as a way to “give Bitcoin some yield.”
He noted that this would effectively serve as a sequel to IBIT, which has already become the largest spot Bitcoin ETF in the world.
Filing Suggests SEC Application Imminent
Registering a Delaware trust is often a prerequisite for submitting a formal application to the U.S. Securities and Exchange Commission. Companies typically follow with either an S-1 registration statement or a 19b-4 filing, both of which are necessary to seek approval for a new ETF.
The filing arrives at a time when U.S. regulators are showing greater flexibility toward crypto assets. The shift aligns with President Donald Trump’s pledge to make the United States a hub for cryptocurrency innovation.
IBIT Dominates the Market
BlackRock already leads the ETF sector through its iShares Bitcoin Trust. Since its launch in January 2024, IBIT has attracted more than $60.7 billion in inflows. This translates to holding over 768,285 BTC, making it the largest product of its kind. Fidelity’s rival fund, the Wise Origin Bitcoin Trust (FBTC), is far behind at $12.3 billion.
Solving Bitcoin’s Yield Dilemma
For many years, one major drawback of Bitcoin as an investment has been its lack of inherent yield. Traditional investors often prefer assets that can generate income through dividends or interest. Several companies have attempted to solve this issue.
For context, Strategy’s STRK convertible preferred stock uses more than 639,000 Bitcoin to deliver regular income to investors. BlackRock’s proposed ETF would build on similar efforts, offering another option for those seeking both crypto exposure and stable payouts.
Clear Focus on Bitcoin and Ethereum
Despite growing speculation about altcoin ETFs, BlackRock appears cautious. ETF analyst Eric Balchunas noted that the company is focused on building around Bitcoin and Ethereum. For now, it is steering clear of products tied to smaller cryptocurrencies.
Balchunas added that this leaves the “horse race” for altcoin ETFs open to other issuers. Competitors may target different digital assets as they strive to capture new market segments.
Altcoin ETF Approvals Could Accelerate
Still, the competitive landscape is evolving quickly. As reported by The Crypto Basic, the SEC recently approved a generic listing standard that allows exchanges to list certain crypto ETFs without requiring a case-by-case review. This change could speed up approvals for products linked to alternative digital currencies.
Among the cryptocurrencies most often mentioned as potential ETF candidates are Litecoin, Solana, XRP, and Dogecoin. Such products would expand investor options, though BlackRock is content to concentrate on the two largest assets for now.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
