TechFlow reported on June 17 that 10x Research has raised concerns about BITA, the Bitcoin Enhanced Income exchange-traded fund launched by BlackRock. According to the firm’s analysis, the product may contain a strategy design flaw because it seeks income by selling call options, a structure that 10x Research says can cause investors to underperform spot Bitcoin in most market environments and fail to achieve the desired absolute return.
Fixed monthly call selling comes under criticism
10x Research said BITA follows a fixed rule that sells call options every month. In this structure, the income comes from option premium, but investors must give up part of Bitcoin’s upside potential in exchange. The firm argued that this trade-off can be unfavorable not only in one specific market condition, but also when Bitcoin is rising, moving sideways or falling.
When Bitcoin rises, call selling can cap the investor’s participation in price gains. In a sideways market, the premium can create income, but the fixed execution rule still forces the same trade-off between yield and upside. When Bitcoin falls, the option income does not automatically remove the effect of the decline in the underlying asset. On that basis, 10x Research questioned whether BITA’s design should be viewed as a dependable income-enhancement mechanism.
10x Research favors timing and conditional execution
Instead of a mechanical monthly process, 10x Research said its own framework emphasizes “timing” and “conditional execution.” Under that view, call options should be sold only when market conditions are favorable for collecting option premium, rather than according to a fixed calendar rule. The core disagreement is therefore about whether an income strategy should be systematic and constant, or adjusted according to the market environment.
The firm also said Bitcoin’s high volatility mainly stems from information asymmetry among market participants and a highly market-driven promotional environment. Over time, many investors have tried to capture returns from that volatility through systematic strategies, but most have not succeeded. The debate around BITA is centered on whether this kind of income-style Bitcoin product can deliver better long-term results than simply holding BTC directly.