BitWise Asset Management has rolled out three new stock market-related funds (ETFs) that have been designed to generate consistent monthly income by using the high volatility of crypto-linked shares, according to a 3 April rack.
The newly launched ETFs include the BitWise Coinbase -option strategy ETF (ICOI), Bitwise Marathon Digital Option Income Strategy ETF (IMRA) and Bitwise MicroStrategy Option Stategy ETF (IMST).
Each fund is built around a covered call strategy with Coinbase, Marathon Digital and Micro Strategy shares respectively.
All three funds have a net cost ratio of 0.98%. In addition, ICOI and IMST have a gross cost ratio of 0.99%, but Bitwise has implemented an exemption from the reimbursement for this until March 25, 2027.
Bitwise’s ETF strategy
In contrast to passive income products, these ETFs use a practical approach. Fund managers sell out-of-the-money call options while retaining their stock ownership. The premiums collected from these options are then distributed to investors as a monthly income.
This model offers consistent returns but comes with considerations. Although it enables investors to take advantage of option premiums, it also pops up above when the share price that goes beyond the exercise price of the option. Moreover, investors still bear a downward risk linked to the general performance of the share.
Given this, Bitwise CEO Hunter Horsley pointed out that the high volatility in the cryptomarkt is not only a risk, it is also a powerful chance of income.
He noted that generating reliable income from such price fluctuations requires more than just a formual approach. The strategy depends on the active monitoring of market trends, evolving investor sentiment and legal developments.
Jeff Park, head of Alpha Strategies in Bitwise, emphasized the importance of precision and timing in implementing this strategy. He explained that the volatility of shares such as MSTR, Coin and Mara creates an ideal environment for generating income.
Success, however, depends on the stay of news cycles, capital flows and price trends in the option market.
Park added:
“The approach we follow with Imst, ICOI and IMRA, [would look] To bring investors the combination of monthly income and strong, limited participation in stock profits. “
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