Asset manager Roundhill has introduced the first covered Bitcoin ETF in the US market, according to a press release from January 18.
The exchange-traded fund is called Roundhill Bitcoin Covered Call Strategy ETF. It trades under the symbol "YBTC" on the Cboe BZX exchange.
Dave Mazza, chief strategy officer at Roundhill Investments, said:
"YBTC offers investors an attractive combination of high income potential and bitcoin exposure...Investors have been clamoring for a covered call ETF with bitcoin exposure and we are proud to be the first to bring such a product to the market." US market".
According to the rest of the press release, YBTC offers exposure to Bitcoin by employing a covered call strategy on Bitcoin ETFs. It aims to produce monthly income and is subject to a monthly increase limit.
Roundhill noted that Bitcoin itself does not produce operating profits or cash flows. However, because Bitcoin has shown significant price volatility, he said he could generate options income from his call selling strategy and pass that income on to investors. This could fill a gap in cryptocurrency investment opportunities.
Roundhill website He further explains that the fund is actively managed, meaning investors do not need to spend time and money carrying out their own trading strategy. This managed approach is a key feature of covered call ETFs.
The fund provides access to futures, not spot
James Seyffart, Bloomberg ETF Analyst admitted the launch, noting that Roundhill's YBTC "uses futures, not spot, but will generate returns through options."
Roundhill's own website confirms that YBTC is not a spot Bitcoin ETF and does not invest in Bitcoin directly. This approach distinguishes YBTC from several Bitcoin ETFs that gained approval on January 10, including those from Black Rock and Fidelity.
YBTC currently has $2.5 million in funds under management. A further breakdown indicates that the fund is made up of 93.8% US Treasury bills, valued at $2.35 million. Another 7.35% consists of the ProShares Bitcoin Strategy ETF (BITO), valued at just $184,376. Roundhill has not commented on the fact that the fund currently appears to hold a small proportion of cryptocurrency-related stocks.
Unrelated to Roundhill's current offer, Grayscale also aims to launch your own Bitcoin ETF covered call. Instead, that fund will provide exposure to a spot Bitcoin exchange-traded fund, specifically the company's recently approved GBTC ETF.
