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The SEC approved spot bitcoin ETFs just over a year ago, in January 2024. Eleven new Bitcoin ETFs received approval at that time. Over the course of 2024, fund sponsors launched ETFs that make short options trades to generate income, with Bitcoin ETFs or futures as the underlying assets.

Investors and traders have long used option trading to boost their realized returns. Selling put or call options is a strategy to generate income. The option seller takes a “short” position in exchange for the price or premium. The option seller is obliged to deliver the underlying asset if certain time and price conditions are met.

With the approval of spot Bitcoin ETFs, other ETFs using option selling strategies with Bitcoin as the underlying asset soon followed.

Here are some of the option strategy cryptocurrency ETFs and their yields and track records.

YieldMax Bitcoin Option Income Strategy ETF (YBIT) employs a synthetic covered call strategy using one or more U.S.-listed Bitcoin ETFs. YBIT launched on April 22, 2024. From its launch through January 31, the ETF posted a total return of 11.42%. YBIT has a current distribution yield of 84.24%. YieldMax ETFs tend to sport very high distribution yields with a cost of some NAV erosion, so total returns need to be monitored.

Simplify Bitcoin Strategy PLUS Income ETF (MAXI) launched on September 29, 2022. The folks at Simplify use Bitcoin futures as the underlying asset, which have traded for longer than the Bitcoin ETFs. The MAXI dividend varies significantly. The website shows a current distribution yield of 6.15%. However, the trailing twelve-month yield is 24.5%. MAXI has posted a 312.7% total return for the fund’s life.

Roundhill Ether Covered Call Strategy ETF (YETH) uses the Grayscale Ethereum Mini Trust ETF (ETH) as its underlying asset. The ETF launched on September 4, 2024 and has returned 10.7% since inception. The Roundhill website gives a current distribution yield of 88.34%.

These ETFs can sport some eye-popping yields, but don’t invest on yield alone. You need to be aware of the value of the underlying cryptocurrency and watch that the options strategy doesn’t overeat into the ETF NAV.

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