Grayscale, a leading crypto asset manager, has introduced two new Bitcoin ETFs, offering a fresh way for investors to earn income while holding BTC. These ETFs, Bitcoin Covered Call ETF (BTCC) and Bitcoin Premium Income ETF (BPI), use covered call strategies to generate returns, making them different from traditional Bitcoin funds.
BTCC: An Income-First Strategy
First, the Grayscale Bitcoin Covered Call ETF (BTCC), which prioritizes income generation. It achieves this by systematically writing calls close to spot prices on Bitcoin exchange-traded products, including the Grayscale Bitcoin Trust ETF (GBTC) and the Grayscale Bitcoin Mini Trust ETF (BTC).
It also provides a safety net in case of market downturns, making it attractive for those looking to balance risk and reward.
BPI: Balancing Income and Upside
Second, we have the Grayscale Bitcoin Premium Income ETF (BPI), which takes a different approach. Unlike BTCC, BPI writes call options at much higher strike prices, meaning investors can still benefit from Bitcoin’s potential rise while earning some additional income.
This strategy allows them to capture more upside compared to BTCC while still maintaining some level of risk management
Benefiting From Bitcoin ETFs
Interestingly, both BTCC and BPI don’t directly hold Bitcoin but instead track other Bitcoin ETFs. This includes Grayscale’s own Bitcoin Trust (GBTC) and Bitcoin Mini Trust (BTC). By doing so, they provide exposure to Bitcoin without the direct risks of holding the cryptocurrency.
However, David LaValle, Grayscale’s Global Head of ETFs, explains the value these funds bring to investors. According to LaValle, BTCC complements existing Bitcoin holdings by adding income, while BPI offers a more strategic alternative to direct Bitcoin ownership, balancing upside potential with consistent income.
Growing Need for Income-Based Bitcoin Products
Institutional interest in Bitcoin has surged since the launch of spot ETFs in January 2024. However, Bitcoin’s volatility remains significant. After a 48% surge in Q4 2024, Bitcoin lost 12% in Q1 2025, contrasting with its historically strong first quarters in 2023 and 2024.
As a result, there is a growing demand for income-generating Bitcoin products like Grayscale’s ETFs to help investors manage volatility.
With these new funds, Grayscale aims to fill this gap by offering income-based strategies that help cushion against Bitcoin’s volatile price swings.
