BlackRock has fired a warning shot in the Bitcoin derivatives ETF arena. Senior Bloomberg ETF analyst Eric Balchunas revealed today that the asset manager filed the fourth amended S-1 for its iShares Bitcoin Premium Income ETF (ticker: $BITA), likely the final step before listing.
The headline number is the fee: 0.65% (65 basis points). That's well below the two largest Bitcoin Covered Call ETFs currently trading, which charge 0.95% and 0.99% respectively. BlackRock appears to be replicating the scale-driven strategy that made its spot Bitcoin ETF $IBIT a success.
0.65% Fee Strike: BlackRock vs. Goldman Sachs
Balchunas expects a very quick launch. The reason: rival Goldman Sachs' similar Premium Income ETF is set to go effective around July 1. BlackRock is under pressure to beat it to market. "Game on," Balchunas commented.
How Premium Income ETFs Work: The Covered Call Trade-Off
These products hold Bitcoin spot (or spot ETFs) and sell Covered Call options to generate premium income. The trade-off: they cap upside during bull runs.
Balchunas also shared a yield comparison of existing products, showing wide variance:
- Roundhill Bitcoin CC Str ETF (YBTC): $16.08B AUM, 82.3% 12-month yield
- NEOS Bitcoin High Income ETF (BTCI): $10.49B AUM, 40.0% yield
- YieldMax Bitcoin Opt Str ETF (YBIT): $5.94B AUM, 101.1% yield
- Grayscale BTC Prem Inc ETF (BPI): $320M AUM, 9.6% yield
The key question: what yield target will BlackRock's $BITA and Goldman's product aim for? A high yield like YBIT's 101% means strike prices near spot, sacrificing upside. A defensive yield like BPI's 9.6% leaves room for Bitcoin gains. The market will learn the answer by July.