Grayscale has introduced two Bitcoin-focused products designed with specific outcomes in mind.
The Bitcoin ETFs that leverage options strategies, utilizing BTC’s market swings to produce alternative sources of income.
As a key player in cryptocurrency asset management, Grayscale Investments rolled out two Bitcoin exchange-traded funds (ETFs) with a focus on specific investment outcomes.
The Grayscale Bitcoin Covered Call ETF (BTCC) and the Grayscale Bitcoin Premium Income ETF (BPI) were unveiled as the company’s latest products in an April 2 announcement.
The two new Bitcoin (BTC) funds, as outlined in an email, intend to create revenue by making use of BTC’s fluctuating prices.
“Both strategies may be considered as an alternative income stream that’s less correlated to traditional income-oriented investments.“
With the goal of capturing top premiums, the Bitcoin Covered Call product aims to maximize income opportunities.
Grayscale suggests that it may provide an extra layer to Bitcoin exposure.
The fund employs a strategy that involves systematically writing calls near the current spot prices.
The hope is that, with Bitcoin’s history of high volatility, investors will generate income by writing paid calls.
Alternatively, the Bitcoin Premium Income product seeks to offer both upside participation and income generation in a balanced way.
Meant to provide an alternative to direct Bitcoin ownership, it strives for a balance between income generation and growth.
The fund’s approach involves systematically writing calls on Bitcoin ETFs, like Grayscale Bitcoin Trust (GBTC) and Grayscale Bitcoin Mini Trust (BTC), targeting strike prices significantly out-of-the-money. The announcement reads:
“By focusing on this type of call writing strategy, BPI allows investors to participate in much of Bitcoin’s upside potential while possibly benefiting from some dividend income.“
Grayscale Investments guarantees that the two new products will create a distinct revenue stream, offering investors an income that is not correlated with other sources.
With the new derivatives, investors will receive monthly distributions and benefit from a structured options management approach.
Grayscale filed earlier this week to launch an ETF, which will include a wide range of spot cryptocurrencies.
Included in this new product are Bitcoin, Ether (ETH), XRP, Solana (SOL), and Cardano (ADA).
The US stock exchange Nasdaq filed with the SEC in late March, asking for permission to list the spot Avalanche ETF by Grayscale Investments.
The 28 crypto products listed on Grayscale’s website consist of 25 single-asset derivatives and three that are diversified.
The approval of its XRP spot ETF, along with other products, is pending for Grayscale and several other asset managers.
The list of products also features the spot Cardano ETF filing and the conversion of the Litecoin Trust into an ETF.
In October last year, Grayscale filed a request with the SEC for permission to convert its Digital Large Cap Fund into an ETF. The ETF would enable investors to purchase a mix of major cryptocurrencies.
