Advisors Seek Income Opportunities in Bitcoin for 2022 | ETF Trends
The latest survey conducted by Bitwise and VettaFi shows that advisor sentiment towards cryptocurrency has significantly improved since the 2024 presidential election. This surge in crypto optimism has sparked an increased interest in bitcoin income strategies among advisors.
Over 400 advisors participated in the annual survey conducted between November and December 2024, with 57% expressing their intention to boost their crypto investments following the election. In particular, 17% of advisors expressed a desire to explore bitcoin income strategies, such as covered call options, as part of their investment approach. When it comes to crypto investments, a whopping 71% of advisors preferred Exchange-Traded Funds (ETFs) for their exposure.
One popular option for those looking to tap into the potential of bitcoin income strategies is the NEOS Bitcoin High Income ETF (BTCI). Launched in October, this actively managed fund is designed to generate monthly income through a covered call strategy while providing exposure to bitcoin through exchange-traded products. By investing in BTC and tracking its price performance, this fund aims to offer investors the opportunity to earn steady income.
As of December 31, 2024, BTCI boasted a distribution rate of 28.17%. This rate is calculated by annualizing the most recent distribution and dividing it by the fund’s Net Asset Value (NAV). BTCI achieves its income generation by investing in bitcoin futures ETFs and using options contracts on BTC futures ETFs. This approach creates synthetic exposure to bitcoin while also writing covered call options on BTC futures ETFs, allowing for high monthly income potential.
Covered call options involve purchasing an asset while simultaneously writing a call on the underlying asset. This generates a premium but caps the potential upside if the underlying asset appreciates. Strategies like BTCI can benefit from bitcoin’s heightened volatility, as increased volatility can lead to higher premiums on call options and, therefore, higher income potential for investors.
The fund’s managers also utilize tax-loss harvesting to capture losses that can offset gains made within the fund. With an expense ratio of 0.98%, BTCI offers investors a cost-effective way to access the potential income opportunities of bitcoin.
For more news, information, and analysis in the world of tax-efficient income strategies, be sure to check out the Tax-Efficient Income Channel.
