BlackRock has officially set a management fee of 65 basis points for its anticipated iShares Bitcoin Premium Income ETF (BITA). The ETF aims to generate income through a covered-call strategy, which involves writing call options on shares of its spot Bitcoin ETF, IBIT. This move comes as competition heats up in the burgeoning Bitcoin income ETF space, with Goldman Sachs also preparing to launch a similar product.
Bloomberg analyst Eric Balchunas highlighted that the recent SEC filing, which includes an amended Form S-1, is likely the final adjustment needed before the fund’s launch. BITA is expected to trade on Nasdaq, targeting income by writing monthly call options while tracking the price of Bitcoin (BTC). The management fee of 0.65% of net assets is positioned between BlackRock’s own Bitcoin Trust ETF and its competitors, which charge higher fees of 95 and 99 basis points.
During recent trading, the price of IBIT dipped by 0.20%, and retail sentiment surrounding the investment remained bearish, although activity on Stocktwits surged from moderate to extremely high levels. Balchunas pointed out the urgency for BlackRock to launch ahead of Goldman Sachs, which is lining up its Premium Income ETF with an anticipated effective date around July 1. He noted that this competition is pivotal, remarking, “Game on.”
The Bitcoin income ETF market is expanding rapidly, with yields differing significantly across existing offerings. These variances hinge on how conservatively or aggressively funds write options related to Bitcoin’s performance. Current participants in this nascent arena offer yields that range dramatically, such as YieldMax’s YBIT at nearly 101% and NEOS’s XBCI at only 10%. As the specifics of BITA’s yield are yet to be disclosed, many investors are keen to see how BlackRock’s strategy will unfold in contrast to Goldman Sachs and other market players.
