Leading asset manager Grayscale has recently introduced two new Bitcoin-focused Exchange Traded Funds (ETFs). Announced in a press statement, the Bitcoin Covered Call ETF and the Bitcoin Premium Income ETF are designed to help investors earn income from Bitcoin’s price movements.
The Bitcoin Covered Call ETF and the Premium Income ETF use option strategies to generate regular returns. These funds offer an alternative way to benefit from Bitcoin’s volatility without directly buying or selling the cryptocurrency.
How the Bitcoin Covered Call ETF Works
The Bitcoin Covered Call ETF is focused on generating steady income by selling call options on Bitcoin exchange-traded products (ETPs). This ETF will use Bitcoin-related assets such as Grayscale’s Bitcoin Trust ETF (GBTC) and the Mini Trust ETF (BTC).
Notably, a call option gives someone the right to buy Bitcoin at a specific price, and the fund earns a premium by selling these options. The fund will sell call options close to Bitcoin’s current market price.
This approach aims to generate income regularly while allowing investors to benefit from Bitcoin’s overall performance. According to Grayscale, this method uses Bitcoin’s natural volatility to generate income distributed to shareholders.
The Bitcoin Premium Income ETF’s Strategy
Meanwhile, the Bitcoin Premium Income ETF also aims to generate steady income but works differently. Instead of selling options close to Bitcoin’s price, it sells them higher. This approach is only useful if Bitcoin’s price surges.
This strategy will help investors benefit from Bitcoin’s potential rise while earning income from option premiums. Like the Covered Call ETF, the Bitcoin Premium Income ETF invests mainly in Bitcoin ETPs like GBTC and BTC.
According to the press release, both ETFs will be actively managed, meaning experts will make investment decisions as needed. While Grayscale will handle the option-trading strategies. The goal is to maximize income and provide monthly payouts to investors.
This launch comes just a day after Grayscale filed to turn its Digital Large Cap Fund into an ETF. This shows the firm’s commitment to growing its crypto investment portfolio.
Bitcoin’s Price Reaction and Market Outlook
Following this announcement, Bitcoin’s price surged to $86,920, up by 1.87% in the last 24 hours, according to CoinMarketCap data. This modest increase reflects strong investor interest as many believe the leading crypto asset could be poised for a rebound towards $90,000.
However, traders also watch for updates on President Donald Trump’s tariff announcement, which could impact the overall market sentiment.
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