Bitcoin · Goldman Sachs · Decrypt
BlackRock Rolls out BITA Bitcoin ETF, Trading Partial Upside for Double-Digit Yield
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BlackRock will begin offering an exchange-traded fund to investors that limits Bitcoin gains in exchange for double-digit payouts, the Wall Street giant announced on Tuesday.
Key facts
- BlackRock filed an application for BITA in January, and the product is set to compete with the NEOS Bitcoin High Income ETF, which has a higher expense ratio and debuted in 2024
- Robert Mitchnick, head of digital assets at BlackRock, described the ETF as a “hybrid Bitcoin exposure product” that’s establishing a different payoff and yield profile than the firm’s $48.6 billion
- The way the math works today, you can think of it as 70% upside retention in IBIT and a mid-to-high-teens yield,” he said
- To mirror Bitcoin’s market price, the fund splits its holdings between actual cryptocurrency and BlackRock's iShares Bitcoin Trust ETF (IBIT)
Summary
BlackRock unveiled an ETF that limits Bitcoin gains in exchange for double-digit payouts by selling call options on its holdings. Under current market conditions, the ETF would offer "a mid-to-high-teens yield," according to BlackRock's Robert Mitchnick. The ETF's debut comes after Goldman Sachs filed an application for a similar yield-generating product in April. The iShares Bitcoin Premium Income ETF, which is set to begin trading on the Nasdaq under the ticker symbol BITA, seeks to provide investors with participation in the digital asset’s upside while generating monthly options premium, BlackRock said in a press release.