BlackRock eyes new Bitcoin ETF with premium

BlackRock, the world’s largest asset manager, has filed to launch a second Bitcoin-focused exchange-traded product that would give investors exposure to the cryptocurrency — along with a little yield.

The iShares Bitcoin Premium Income ETF would feature Bitcoin, cash, and shares of BlackRock’s two-year-old Bitcoin ETP, the iShares Bitcoin Trust, or IBIT.

To generate the “monthly premium income” for the new ETP, BlackRock would sell call options on the IBIT shares, according to the filing.

“Although the Shares [in the iShares Bitcoin Premium Income ETF] are not the equivalent of a direct investment in bitcoin or in a spot bitcoin ETP, they provide investors with an alternative method of achieving investment exposure to bitcoin through the securities market, while generating premium income,” the filing reads.

BlackRock’s IBIT has seen massive success since its launch in 2024. It is the largest crypto-focused ETF, holding Bitcoin worth nearly $70 billion, according to DefiLlama data. Its second closest competitor is Fidelity’s Bitcoin ETF, with just $17 billion in Bitcoin.

The filing is the latest development to hint at massive demand for Bitcoin products offered by the giants of traditional finance.

Earlier this month, Morgan Stanley announced it would launch its own spot Bitcoin ETF.

“It is unheard of for a vanilla ETF product to launch two years after the first to market has already secured the liquidity throne,” Jeff Park, the investment chief at ProCap BTC, said at the time.

BlackRock has been among the most aggressive in embracing crypto. CEO Larry Fink has spoken approvingly of Bitcoin’s hard supply cap and resistance to fiat-style debasement, and just last week he said it was “necessary” to move financial markets onchain.

“We would be reducing fees, we would do more democratisation,” Fink said in front of a group of power brokers at a World Economic Forum panel in Davos, Switzerland.

“[If] we have one common blockchain, we could reduce corruption.”

Coinbase would serve as the Bitcoin custodian for the iShares Bitcoin Premium Income ETF, while BNY Mellon would serve as its custodian for cash and IBIT shares.

Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can reach him at [email protected].