Grayscale launches two income ETFs on Bitcoin to leverage volatility

Grayscale changes strategy and launches two ETFs linked to Bitcoin to ensure that volatility becomes a source of diversified income. The two funds Grayscale Bitcoin Covered Call ETF (BTCC) and Grayscale Bitcoin Premium Income ETF (BPI) will distribute income monthly. 

Grayscale and the two income ETFs on Bitcoin: volatility as a source of income

Grayscale announced that it has launched two income ETFs on Bitcoin, leveraging its volatility: Grayscale Bitcoin Covered Call ETF (BTCC) and Grayscale Bitcoin Premium Income ETF (BPI).

Grayscale announces the new ETFs on Bitcoin BTCC and BPI

“Through two different approaches to the systematic writing of covered calls, both $BTCC and $BPI seek to leverage the distinctive volatility characteristics of #Bitcoin to generate income.”

In practice, these are two ETFs that offer two different approaches to generate income, taking advantage of the volatility of Bitcoin.

Specifically, the ETF BTCC will involve call options near-the-money on ETP Bitcoin, including the company’s GBTC and BTC funds. Here, the strategy aims to prioritize regular income over long-term exposure to Bitcoin price movements.

The ETF BPI, on the other hand, sells options at higher strike prices. Here, there is the possibility to partially participate in the appreciation of Bitcoin, while simultaneously generating income through option premiums.

Grayscale and the two income ETFs on Bitcoin based on options

The two new income ETFs on Bitcoin by Grayscale are both based on options and will distribute the income monthly. 

In fact, Grayscale has designed these funds precisely so that they are actively managed, without the investor having to directly hold BTC. 

In this regard, David LaValle, Global Head of ETFs at Grayscale, said:

“Grayscale Bitcoin Covered Call ETF can complement investors’ existing exposure to Bitcoin by adding income, while Grayscale Bitcoin Premium Income ETF offers an alternative to owning Bitcoin, aiming to balance bull participation and income generation for investors. We are aware that each investor has unique needs.”

The asset manager has thus expanded the offering of its suite of ETFs, starting to offer a structured exposure to Bitcoin. Grayscale is using Bitcoin ETF strategies that have historically been used in income equity portfolios.

In fact, these two income-focused crypto funds highlight a shift in awareness towards a market that seems to be on the path of maturation, rather than growth. 

The official request for the AVAX spot ETF

At the end of last month, the Nasdaq submitted an official request to the Securities and Exchange Commission (SEC) to list the Grayscale AVAX Trust as a spot ETF.

This is a new evolution of the crypto products signed by Grayscale. In fact, the idea is to transform the closed-end AVAX fund active since August 2024, into a regulated Exchange-Traded Fund. 

Another important step for Grayscale’s expansion strategy in the ETF sector.