iShares Launches Bitcoin Premium Income ETF

iShares has launched the iShares Bitcoin Premium Income ETF (BITA). The fund is a covered-call ETF that seeks bitcoin exposure and attempts to generate income by selling call options on the iShares Bitcoin Trust ETF (IBIT). Its net expense ratio is 65 basis points.

BITA sells call options on IBIT rather than on physical bitcoin, trading some potential upside for option premium income. iShares describes the strategy as transforming an asset with no income into one that pursues premium income.

The fund joins a small set of bitcoin income ETFs, including NEOS’s Bitcoin High Income ETF (BTCI), which began trading in October 2024. BTCI reports a 26.7% distribution rate and has added more than $650 million in net inflows over the past six months. Over the same period, IBIT recorded outflows exceeding $500 million.

Fee levels differ between the products: BITA charges 65 basis points while BTCI charges 99 basis points. The funds also differ in how their covered-call programs are run and in the sources that fund their distributions.

Covered-call ETFs generate income by selling call options against an asset or an ETF that holds the asset. For bitcoin, which does not pay dividends or interest, selling calls produces option premium income but can limit upside participation when prices rise.

Investors comparing BITA and BTCI can review each fund’s fee structure, the source and stability of distributions, and the length of performance history.