A registered trust company was filed by BlackRock to back its proposed Bitcoin Premium Income ETF, a yield-generating product that would complement its $87 billion spot Bitcoin ETF, IBIT.
On Thursday, a Delaware trust company was registered by asset management giant BlackRock for its proposed Bitcoin Premium Income ETF, signaling a push to broaden its Bitcoin offerings.
According to Bloomberg ETF analyst Eric Balchunas, covered call options on Bitcoin futures would be sold by BlackRock’s proposed product to collect premiums and generate yield.
Potential upside from BlackRock’s spot Bitcoin ETF, which mirrors the digital asset’s price, would be forfeited in exchange for the regular distributions.
“This is a covered call Bitcoin strategy in order to give BTC some yield. This will be a ’33 Act spot product, sequel to the $87b $IBIT.”
It is indicated by registering a trust filing in Delaware that an ETF issuer will soon submit an S-1 registration statement or 19b-4 filing with the Securities and Exchange Commission to officially commence the process.
Openness to a wider range of crypto investment products has been indicated by US regulators, particularly the SEC. This aligns with President Donald Trump’s promise to establish the nation as the “crypto capital of the world.”
The new BlackRock product would complement its iShares Bitcoin ETF (IBIT), which has recorded over $60.7 billion in inflows since launching in January 2024. This fund, by far the largest of its kind, is followed by the Fidelity Wise Origin Bitcoin Fund (FBTC) at $12.3 billion.
Bitcoin Yield Products Gradually Enter the Market
Bitcoin was overlooked by many traditional finance investment firms early on because it isn’t a native yield-generating asset.
However, solutions have been created, such as one of MicroStrategy’s convertible preferred stock offerings, STRK, which leverages its 639,835 Bitcoin to offer investors stable income.
If approved, the few prominent yield-generating Bitcoin products in the US would be joined by BlackRock’s proposed fund.
BlackRock to Avoid Altcoin ETF Frenzy, Analyst Predicts
According to Balchunas, the filing shows that BlackRock is choosing to focus on Bitcoin and Ether, and other coins are being left aside, at least for now.
“The contest for these other coins is made much more wide open by this,” he said.
A generic listing standard that won’t require individual assessments of each application was approved by the SEC last week, potentially speeding up future approvals.
Among the cryptocurrencies most likely to next be converted into an ETF are Litecoin, Solana, XRP, and Dogecoin.
