Income ETFs tied to bitcoin, ether draw big inflows

Options-based exchange-traded funds tied to bitcoin and ether drew substantial inflows in 2026 despite weakness in broader cryptocurrency prices. The NEOS Bitcoin High Income ETF (BTCI) holds $1.15 billion in assets and posts a 26.72% distribution rate. The NEOS Ethereum High Income ETF (NEHI) carries a 32.99% distribution.

Both funds use a covered-call strategy, selling call options on large, liquid spot ETFs that hold bitcoin and ether. The funds collect option premiums and use that income to fund regular distributions.

BTCI has attracted roughly $500 million of net inflows so far in 2026 and will reach its second anniversary in October. NEHI follows the same structure for ether exposure and has been presented to investors as a yield-oriented alternative to plain-vanilla spot ETFs.

Selling call options limits upside beyond option strike prices, so the funds may not capture full gains if the underlying spot ETFs climb above those levels. Distribution rates reflect option income and can fluctuate as option premiums and fund performance change.

The income funds launched after the January 2024 debut of spot bitcoin ETFs. Financial advisers and retail investors continue to include crypto ETFs in portfolios for long-term exposure, while some investors use income-focused products to generate current cash distributions from option premiums.

Todd Rosenbluth, director of research at VettaFi, noted that options-based funds have expanded choices within the crypto ETF market and described BTCI as “the most popular of the bitcoin-related ETFs.” He also highlighted the sizable inflows to BTCI this year.