Bitwise unveils 3 new ETFs to capitalize on crypto volatility for monthly income

Bitwise's new ETFs utilize covered calls on crypto-linked stocks to transform market volatility into monthly income.

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

Bitwise Asset Management has rolled out three new exchange-traded funds (ETFs) designed to generate consistent monthly income by leveraging the high volatility of crypto-linked stocks, according to an April 3 statement.

The newly launched ETFs include the Bitwise Coinbase Option Income Strategy ETF (ICOI), Bitwise Marathon Digital Option Income Strategy ETF (IMRA), and Bitwise MicroStrategy Option Income Strategy ETF (IMST).

Each fund is built around a covered call strategy using Coinbase, Marathon Digital, and MicroStrategy stocks, respectively.

All three funds carry a net expense ratio of 0.98%. Additionally, ICOI and IMST have a gross expense ratio of 0.99%, but Bitwise has implemented a fee waiver for these until March 25, 2027.

Bitwise’s ETF strategy

Unlike passive income products, these ETFs take a hands-on approach. Fund managers sell out-of-the-money call options while maintaining their equity holdings. The premiums collected from these options are then distributed to investors as income monthly.

This model 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. Moreover, investors still bear downside risk tied to the stock’s overall performance.

Considering this, Bitwise CEO Hunter Horsley pointed out that the high volatility in the crypto market is not just a risk, it’s also a powerful income opportunity.

He noted that generating reliable income from such price swings requires more than just a formulaic approach. The strategy depends on actively monitoring market trends, evolving investor sentiment, and regulatory developments.

Jeff Park, Head of Alpha Strategies at Bitwise, emphasized the importance of precision and timing in executing this strategy. He explained that the volatility of stocks like MSTR, COIN, and MARA creates an ideal environment for income generation.

However, success depends on staying ahead of news cycles, capital flows, and pricing trends in the options market.

Park added:

“The approach we’re taking with IMST, ICOI, and IMRA, [would look] to bring investors the combination of monthly income and strong, limited participation in equity gains.”

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