BlackRock expands its bitcoin fund lineup with a new income-focused filing

BlackRock is pushing further into the crypto ETF space with plans to launch a bitcoin-linked income product that uses options to generate yield.

The world’s largest asset manager, which oversees roughly $12.5 trillion in assets, has filed a Form S-1 with the U.S. Securities and Exchange Commission to list the iShares Bitcoin Premium Income ETF. The proposed fund is designed to provide income while maintaining exposure to bitcoin.

According to the filing, the ETF would actively manage bitcoin exposure either directly or through shares of BlackRock’s iShares Bitcoin Trust (IBIT), while generating income by selling call options on that exposure. This “covered-call” strategy, widely used in equity income funds, involves selling the right to buy the underlying asset at a set price, allowing the fund to collect option premiums.

While covered-call strategies have already been adopted by several crypto-focused managers, BlackRock’s move is notable given the scale of its platform and the dominance of IBIT, which holds more than $69.7 billion in assets, according to SoSoValue. Bitcoin ETFs offered by BlackRock have become one of the firm’s largest revenue drivers following their rapid growth.

The fund has not yet disclosed a ticker symbol or management fee. It would actively oversee the covered-call program and distribute option premiums to investors as income, a structure that typically limits upside participation in exchange for yield.

Existing bitcoin covered-call ETFs include the Roundhill Bitcoin Covered Call Strategy ETF (YBTC), Amplify Bitcoin Max Income Covered Call ETF (BAGY) and the NEOS Bitcoin High Income ETF (BTCI). These products often offer high distribution rates, but can also dilute net asset value, sometimes through returns of capital. YBTC currently shows a 35.87% distribution rate, while BTCI and BAGY report rates of 27.25% and 37.1%, respectively.

Despite their income appeal, bitcoin options-based ETFs have generally lagged the underlying asset. Over the past 12 months, BTCI is down about 31.3% and YBTC has fallen 45%, compared with bitcoin’s roughly 14% drawdown. BAGY, which launched in late April 2025, has declined about 25% since inception.