Asset manager BlackRock (NYSE: $BLK) is planning to launch a new Bitcoin (CRYPTO: $BTC) exchange-traded fund (ETF) that pays a regular income to investors.
BlackRock has filed with U.S. regulators to launch the iShares Bitcoin Premium Income ETF, which will trade on the Nasdaq exchange under the ticker symbol “BITA.” The ETFs income will be generated from options trades
The fund will hold Bitcoin and shares of BlackRock’s flagship spot Bitcoin ETF (NASDAQ: $IBIT). More From Cryptoprowl: Each month, BlackRock will sell covered call options on the IBIT shares to generate capital that will be returned to investors in the form of income. A call option gives the buyer the right to purchase the shares at a set price.
The fund collects a fee, called a premium, for selling that right. That premium is the income it will give to investors. BlackRock has set a management fee on the new ETF of 0.65%, which is below other covered-call Bitcoin funds that charge fees of 0.95% to 0.99%.