BlackRock, the world’s largest financial assets manager, has registered the name “ishares bitcoin premium inome etf” before the corporate division of Delaware. This is a preliminary step for the final formal presentation before the Securities and Exchange Commission (SEC).
This is an ETF that uses a targeted purchasing strategy related to Bitcoin (BTC). Such actions mean maintaining BTC position and selling purchase options on Bitcoin futures To generate additional income through premiums received, according to what Eric Bulknath, ETF specialist at Bloomberg Intelligence.
The aim is to provide stable dividends to investors focused on income, not just pure exposure to the asset price.
This step follows the Succeation Isshares Bitcoin Trust (IBIT), a Bitcoin Cash ETF managed by BlackRock. Since its release, it has accumulated over $60 million in net tickets. As of January 2024, it currently reaches approximately $870 million in assets under management.
IBIT replicates the price of Bitcoin directly, but this new ETF is trying to reduce some volatility by generating performance.
It is important to clarify the differences in regulations that protect both financial products. Securities 1933 (Act 33) regulates initial value offers and sales, demands that they protect fraudulent investors from major emitters, by requesting a record of detailed prospects before the SEC. Applies to products like this new ETF, which are configured as a more traditional background.
Meanwhile, the 1940 Investment Companies Act oversees investment companies (such as mutual and traditional ETF funds) with strict rules regarding shareholder diversification, governance and protection.
This distinction is important as new ETFs under Law 33 may facilitate faster approval and broader distribution.
Balchunas believes BlackRock is launching another Bitcoin-based product, taking into account all other cryptocurrencies with ETFs.
“This means (BlackRock) will focus on BTC and Ethher (ETH) and keep the rest aside for at least now,” says the specialist.
«This makes the competition for these other cryptocurrencies much more open. There is no office to deal with it. Meanwhile, all other ETFs with Bitcoin eligible purchase options that are in the market and in the process of registering are difficult to get a chance,” says Balchunas.
