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BlackRock, through its iShares unit, has filed a registration statement (S-1) with the U.S. Securities and Exchange Commission (SEC) to launch a new fund called the “iShares Bitcoin Premium Income ETF.”
The fund is designed to give investors exposure to Bitcoin price movements while providing higher monthly income through an options strategy called “covered calls.”
According to the disclosure, the fund will be structured as a “Delaware statutory trust” and will hold Bitcoin as well as stock and cash in the iShares Bitcoin Trust ETF (IBIT), including proceeds from options activity.
The basic idea is to combine Bitcoin price exposure with recurring income based on selling call options on the asset you hold.
Revenue targets will be achieved by actively managing a “covered call” strategy that primarily targets IBIT stock and sometimes sells call options on indices linked to spot Bitcoin ETPs.
This approach typically increases option premium income but may reduce some upside gains when prices rise rapidly.
In terms of custody and management, Coinbase Custody Trust Company will assume the role of Bitcoin custodian, with Anchorage Digital Bank serving as an alternative.
In addition to trust management, Bank of New York Mellon will also undertake the custody of cash and securities.
The request comes as the “IBIT” fund continues to dominate the market for Bitcoin trading products, as data included in the report indicate that despite recent market volatility, the fund manages approximately $70 billion in assets.
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