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At last week’s Exchange ETF conference, discussions centered on the potential arrival of additional cryptocurrency products as diverse investor types enter the market.
Grayscale Investments is among the prominent players expanding its product lineup. The firm has introduced the Bitcoin Covered Call ETF (BTCC) and the Bitcoin Premium Income ETF (BPI).
The firm highlights that these strategies “may be considered as an alternative income stream that’s less correlated to traditional income-oriented investments,” distributing income monthly.
Specifically, BTCC utilizes call and put option contracts referencing a Bitcoin ETP (like Grayscale’s GBTC or BTC trusts). The fund’s sale of call options inherent in its structure may cap gains when Bitcoin ETPs increase in price.
BPI similarly employs call options, specifically targeting out-of-the-money strike prices, aiming to provide a balance between participation in upside moves and income generation.
Cryptocurrency market participants noted the clear progression represented by options on Bitcoin ETFs—including the debut of funds designed for downside protection—as marking a significant evolution for the asset class’s institutional offerings.
Another new development? The emergence of diversified crypto index funds.
Grayscale has filed a registration statement representing another step toward exchanging its Grayscale Digital Large Cap Fund (currently an OTC fund trading shares of bitcoin, ether, Solana, XRP, and Cardano) for an ETF listing, initially seeking placement on NYSE Arca following a failed Arca application last year.
Competitors Hashdex and Bitwise Asset Management are also exploring index ETFs offering exposure beyond just Bitcoin and Ethereum. Further SEC action on these filings is expected over the coming months.
