On Wednesday, Grayscale expanded its selection of bitcoin ETFs with two new funds. The actively managed funds each have net expense ratios of 66 basis points.
First up is the Grayscale Bitcoin Covered Call ETF (BTCC). BTCC’s goal is to generate current income, with a secondary objective of tapping into bitcoin returns.
To do so, the fund invests in a mix of options on different bitcoin ETPs. Among other investment vehicles, these ETPs include Grayscale’s own selection of Bitcoin ETFs. Due to the fund’s focus on income, BTCC looks to generally spell calls close to spot prices.
Meanwhile, Grayscale Bitcoin Premium Income ETF (BPI) looks to offer more of a blend of income and long-term returns. Much like BTCC, BPI’s strategy focuses on investing in options on bitcoin ETPs, including Grayscale’s own products.
BPI differentiates itself by writing calls that are far out-of-the-money. Through this strategy, the fund still offers income, but also capital appreciation through bitcoin’s price shifts.
Bitcoin's Income Potential
“Grayscale® Bitcoin Covered Call ETF may complement an investors existing Bitcoin exposure by adding income, while Grayscale® Bitcoin Premium Income ETF offers an alternative to Bitcoin ownership, aiming to balance upside participation and income generation for investors,” noted David LaValle, global head of ETFs at Grayscale. “We understand that every investor has unique needs, and we’re excited to offer these new products that not only may capture and deliver income but also offer differentiated outcomes and behavioral characteristics tailored to their specific goals.”
Bitcoin’s price performance has been a bit rough this year, but investor interest in cryptocurrency remains strong. By tapping into these new Grayscale funds, investors can utilize different options strategies to build income and portfolio returns.
With BPI and BTCC joining the fold, Grayscale now has seven ETFs listed in the United States. These funds account for well over $22 billion in assets under management.
“There continues to be opportunities for more innovation in cryptocurrency ETFs outside of spot products,” added Roxanna Islam, head of Sector & Industry Research at VettaFi. “Grayscale’s launch of BPI and BTCC supports the trend of integrating cryptocurrencies within the existing ETF ecosystem and into popular strategies used by investors.”
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