tl;dr
Bitwise Asset Management has launched three new ETFs designed to generate monthly income by leveraging the volatility of crypto-linked stocks. The ETFs use a covered call strategy with Coinbase, Marathon Digital, and MicroStrategy stocks. They have a net expense ratio of 0.98%, with fee waivers for ...
Bitwise Asset Management has recently unveiled three new exchange-traded funds (ETFs) geared towards generating consistent monthly income through the high volatility of crypto-linked stocks. These newly launched ETFs, namely Bitwise Coinbase Option Income Strategy ETF (ICOI), Bitwise Marathon Digital Option Income Strategy ETF (IMRA), and Bitwise MicroStrategy Option Income Strategy ETF (IMST), utilize a covered call strategy using Coinbase, Marathon Digital, and MicroStrategy stocks, respectively. Each fund has a net expense ratio of 0.98%, with fee waivers for ICOI and IMST until March 25, 2027.
Unlike passive income products, these ETFs take an active approach, as fund managers sell out-of-the-money call options while maintaining their equity holdings. The premiums collected from these options are distributed to investors as monthly income. This approach offers consistent returns but comes with trade-offs. While it allows investors to profit from option premiums, it also caps potential upside if the stock price rises beyond the option’s strike price, and investors bear downside risk tied to the stock’s overall performance.
Bitwise CEO Hunter Horsley views the high volatility in the crypto market not only as a risk but also as a powerful income opportunity. He emphasized the need for precision and timing in executing this strategy, which relies on actively monitoring market trends, evolving investor sentiment, and regulatory developments. Jeff Park, Head of Alpha Strategies at Bitwise, highlighted the importance of staying ahead of news cycles, capital flows, and pricing trends in the options market for the success of this strategy. He stated, “The approach we’re taking with IMST, ICOI, and IMRA, to bring investors the combination of monthly income and strong, limited participation in equity gains.”