BlackRock, a big company that manages money, applied to create a trust company in Delaware for its new Bitcoin Premium Income ETF on Thursday. This shows that they want to expand their Bitcoin options.
Bloomberg ETF expert Eric Balchunas said that BlackRock’s new plan involves selling covered call options on Bitcoin futures. This means they will earn money from the fees people pay for these options.
Normal investments might give up the chance to make more money by investing in BlackRock’s Bitcoin ETF, which follows the value of Bitcoin. BTC stands for Bitcoin, which is a type of digital money or cryptocurrency.
“This is a strategy using covered calls to earn some income from Bitcoin. ” This will be a product related to the ’33 Act, and it is a follow-up to the $87 billion $IBIT.
When a trust is registered in Delaware, it usually means that an ETF issuer is about to submit an S-1 registration statement or a 19b-4 filing to the Securities and Exchange Commission. This is the first step in starting the process officially.
US regulators, especially the SEC, are showing a willingness to allow more types of crypto investment options. This is part of President Donald Trump’s goal to make America the “crypto capital of the world. ”
The new BlackRock product will go well with its iShares Bitcoin ETF (IBIT), which has already received more than $60. 7 billion since it started in January 2024. This makes it the biggest Bitcoin ETF out there. The next closest is the Fidelity Wise Origin Bitcoin Fund (FBTC), which has $12.3 billion.
Bitcoin earning products are gradually being introduced
One of the main reasons many traditional finance investment companies ignored Bitcoin at first is that it doesn’t naturally earn money on its own.
However, there are some solutions now, like Strategy’s STRK, a type of preferred stock. This investment uses its 639,835 Bitcoin to provide investors with steady income.
If it gets the green light, BlackRock’s new product would be one of the few ways to earn interest on Bitcoin in the US.
BlackRock will not join the trend of altcoin ETFs, according to an analyst
Balchunas said that since many other coins are getting turned into ETFs, BlackRock is focusing on Bitcoin and Ether and stop working with the others, at least for now.
“This makes the competition for these other coins much more competitive,” he said.
Possible approvals could happen faster now because the SEC recently allowed a new general rule that doesn’t need each application to be looked at one by one.
The cryptocurrencies that are most likely to be included in ETFs next are Litecoin and Solana, XRP and Dogecoin.
