BlackRock filed an S‑1 registration statement with the SEC to register the iShares Bitcoin Premium Income ETF, a Nasdaq‑listed product designed to combine spot Bitcoin exposure with option‑written premium income. The filing signals the firm’s push into income‑oriented crypto ETFs at institutional scale.
The BlackRock product aims to deliver regular yield via an actively managed covered‑call strategy while holding Bitcoin and shares of the iShares Bitcoin Trust (IBIT), making it relevant for investors seeking yield and regulated access to Bitcoin.
According to the filing, the fund will generate income primarily by writing call options on its holdings, including shares of IBIT and, from time to time, on indices that track spot Bitcoin ETPs. Premiums collected from those option sales will form the primary cash distribution to investors, with an indicated target yield in the range of 8%–12% annually. Coinbase is named as the custodian for Bitcoin and The Bank of New York Mellon for cash.
That structure creates a mix of outcomes: option premiums can provide a buffer against modest drawdowns and smooth returns versus direct spot exposure, but they also cap upside when Bitcoin rallies above sold strikes. The fund’s active options management introduces assignment and execution risk, and the filing notes the strategy can carry higher fees than passive spot ETFs.
How the BlackRock ETF will generate income and how it works
BlackRock’s filing places the new ETF directly against income‑focused competitors that already use covered‑call or options overlays. Examples cited in the filing include the NEOS Bitcoin High Income ETF (BTCI) with roughly $1.09 billion in AUM and an expense ratio near 0.99%, the Roundhill Bitcoin Covered Call Strategy ETF (YBTC) with about $225 million, and YieldMax’s YBIT at approximately $74 million.
BlackRock’s scale could shift flows within this niche, but fee and execution details in the S‑1 will be decisive for large allocators.
For traders and managers, the operational takeaways are clear: the product reduces variance but limits participation in strong bull runs; option‑related liquidity and implied volatility regimes will materially affect distributions; and assignment risk can force realized sales at strike prices during sharp moves. Those factors imply active hedging and monitoring of open interest, implied volatility and basis will be required.
Investors and traders will now focus on the SEC review and the operational specifics that remain undecided in the filing: expense ratio, ticker, exact index usage and the fund’s precise options governance. Approval and the subsequent listing cadence will determine initial flows and how the new product reshapes rotation between spot Bitcoin ETFs and income‑oriented wrappers.
