BlackRock has filed an S-1 registration statement with the U.S. Securities and Exchange Commission for the iShares Bitcoin Income ETF, setting out a structure that goes beyond simple spot price exposure. Instead of only tracking Bitcoin, the proposed fund would hold BTC and use an options overlay designed to generate cash income.
Yield would come from selling upside through options
According to the source material, the fund would combine direct Bitcoin holdings with an options strategy that sells part of the upside in exchange for immediate premium income. The mechanism described is similar to a covered call approach: the fund keeps the BTC position, but writes contracts that give another party the right to buy at a preset level.
The example in the source uses $95,000, $110,000, and $150,000 to show the trade-off. If BTC stays around $95,000, the fund keeps the position and the premium collected. If Bitcoin rises above $110,000, the fund may have to sell at that strike. If BTC surges to $150,000, gains above the contract level are effectively capped. The income comes at the cost of some upside participation.
A different profile from IBIT
The filing stands apart from BlackRock’s existing spot Bitcoin ETF, IBIT, which is built to follow the price of BTC. This new product is aimed at periods when Bitcoin is not moving sharply higher and investors want return from holding the asset rather than waiting on price appreciation alone.
The source compares the strategy with other covered call funds in the market and says similar products are currently showing yields in the 8% to 12% range. BlackRock, however, has not stated a specific yield target for the proposed ETF. That leaves the central proposition clear enough: give up some of Bitcoin’s open-ended upside in exchange for a steadier stream of premium income.
Filed during a difficult stretch for crypto funds
The timing is notable. The source says crypto funds just recorded $1.73 billion in outflows over a week, the largest exodus since late 2025, and that IBIT was also affected. At the same time, BTC was described as trading around the $90,000 level.
In that setting, an income-focused Bitcoin ETF gives investors a different reason to keep exposure. Rather than relying only on price gains, the structure is meant to offer premium income that may soften the effect of weaker or flat market periods. It changes the product profile from pure directional exposure to a more income-oriented allocation.
Custody and cash operations are assigned to established firms
For the underlying infrastructure, the source says Coinbase Custody would hold the BTC, while Bank of New York Mellon would handle cash and administrative functions. That setup keeps the product within the institutional custody model already familiar in U.S. crypto ETF markets.
What is known for now is the filing itself and the proposed strategy built on spot Bitcoin holdings plus covered call style income generation. Details such as launch timing, fees, and the final distribution profile have not been specified in the material provided.