BlackRock's new bitcoin ETF lets institutions earn from volatility. There's a catch. (opens original article in a new tab)

BlackRock introduces a bitcoin ETF that generates income through volatility by selling call options, aiming for 15% annual yield while maintaining 70% exposure to price gains, which could further reduce bitcoin's volatility.

• BlackRock launches iShares Bitcoin Premium Income ETF (BITA) to generate income from bitcoin's volatility
• BITA uses covered-call strategy by selling call options on its IBIT holdings to create a target 15% annual yield
• Bitcoin's implied volatility has been declining since 2022 due to systematic call overwriting by institutional investors
• BITA's strategy may reduce bitcoin's price volatility by increasing option supply and putting downward pressure on implied volatility