Bitwise Asset Management recently introduced three new exchange-traded funds (ETFs) that aim to provide investors with a steady monthly income through the utilization of the high volatility of crypto-linked stocks. The Bitwise Coinbase Option Income Strategy ETF (ICOI), Bitwise Marathon Digital Option Income Strategy ETF (IMRA), and Bitwise MicroStrategy Option Income Strategy ETF (IMST) are the latest additions to their ETF lineup.
These funds are structured around a covered call strategy using stocks from Coinbase, Marathon Digital, and MicroStrategy. Each fund has a net expense ratio of 0.98%, with ICOI and IMST having a gross expense ratio of 0.99%, but Bitwise has waived these fees until March 25, 2027.
Unlike traditional passive income products, Bitwise’s ETFs take a more active 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 monthly income. This strategy offers consistent returns but does come with some trade-offs, such as capping potential upside if the stock price rises beyond the option’s strike price and bearing downside risk tied to the stock’s overall performance.
Bitwise CEO Hunter Horsley emphasized that the high volatility in the crypto market presents not only risks but also significant income opportunities. Generating reliable income from these price swings requires a dynamic approach that involves actively monitoring market trends, investor sentiment, and regulatory developments.
Jeff Park, Head of Alpha Strategies at Bitwise, highlighted the importance of precision and timing in executing this strategy. He noted that the volatility of stocks like MSTR, COIN, and MARA creates an ideal environment for income generation. However, success in this strategy hinges on staying ahead of news cycles, capital flows, and pricing trends in the options market.
Park stated, “The approach we’re taking with IMST, ICOI, and IMRA aims to bring investors the combination of monthly income and limited participation in equity gains.”
In conclusion, Bitwise’s new ETFs offer investors a unique opportunity to generate income from the high volatility of crypto-linked stocks. By taking an active approach to covered call strategies, these funds aim to provide investors with consistent monthly income while also participating in the potential gains of the underlying equities. With a focus on precision, timing, and monitoring market trends, Bitwise’s ETFs seek to capitalize on the income opportunities presented by the crypto market’s price swings.