Asset management leader BlackRock has submitted an application for a Delaware trust company associated with its upcoming Bitcoin Premium Income ETF, hinting at an effort to expand its Bitcoin portfolio.
Bloomberg ETF analyst Eric Balchunas stated that BlackRock’s proposed fund would implement covered call options on Bitcoin futures to earn premiums for yield generation.
However, the regular distributions would sacrifice potential gains available from investing in BlackRock’s spot Bitcoin ETF, which reflects Bitcoin’s (BTC) price movements.
“This represents a covered call Bitcoin strategy intended to provide BTC with some yield. This will be a ’33 Act spot product, following the $87b $IBIT.”
Establishing a trust in Delaware typically suggests that an ETF issuer is ready to file an S-1 registration statement or 19b-4 application with the Securities and Exchange Commission, initiating the formal process.
U.S. regulators — particularly the SEC — have expressed a willingness to embrace a broader array of cryptocurrency investment options, aligning with President Donald Trump’s commitment to establishing America as the “crypto capital of the world.”
The new offering from BlackRock is intended to enhance its iShares Bitcoin ETF (IBIT), which has accumulated over $60.7 billion in inflows since its launch in January 2024 — making it the largest of its kind — followed by the Fidelity Wise Origin Bitcoin Fund (FBTC) at $12.3 billion.
Bitcoin yield products are gradually emerging
One of the primary reasons many traditional financial investment firms initially overlooked Bitcoin is due to its lack of native yield-generating characteristics.
Nevertheless, solutions have emerged, including Strategy’s convertible preferred stock offering, STRK, which utilizes its 639,835 Bitcoin to provide investors with consistent income.
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If approved, BlackRock’s proposed product would contribute to the limited number of notable yield-generating Bitcoin offerings in the U.S.
BlackRock will avoid the altcoin ETF trend, analyst asserts
Balchunas remarked that, in light of the various other coins “set to be ETF-ized,” BlackRock is choosing to focus on Bitcoin and Ether (ETH) while “steering clear of the rest, for the time being.”
“This opens up the race significantly for these other coins,” he noted.
Approvals may also start arriving more swiftly, as the SEC approved a general listing standard last week that eliminates the need for individual assessments of each application.
Among the cryptocurrencies likely to be the next wrapped in ETF format are Litecoin (LTC), Solana (SOL), XRP (XRP), and Dogecoin (DOGE).
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