EXCLUSIVE: Roundhill Launches Covered Call Bitcoin ETF, 'Potential High Income From Bitcoin's Volatility'

One of the biggest storylines for the investing world and cryptocurrency sector in years was the approval of Bitcoin ETFs, which happened recently with the SEC giving the green light to 11 ETFs.

A new Bitcoin BTC/USD-themed ETF from Roundhill Investments offers a new way to trade the cryptocurrency.

What Happened: Roundhill Investments launched the Roundhill Bitcoin Covered Call Strategy ETF YBTC, a new ETF that follows the covered call strategy utilized by investors.

"Roundhill Investments launched the Roundhill Bitcoin Covered Call Strategy ETF, which is the first covered call Bitcoin ETF listed in the U.S. It aims to generate monthly income through selling call options on Bitcoin ETFs, while subject to a monthly upside cap," Roundhill Investments Chief Strategy Officer Dave Mazza told Benzinga.

Unlike the other Bitcoin ETFs, the Roundhill Bitcoin Covered Call Strategy ETF does not hold Bitcoin directly. Instead, the ETF offers the covered call strategy, while having exposure to Bitcoin.

"This structure offers a blend of income potential and Bitcoin exposure, which is distinctive in the market."

While the new ETF won't be for everyone, as some people want to own Bitcoin directly and others want to trade the new Bitcoin ETFs, the Roundhill offering targets an audience looking for income.

"The ETF targets investors looking for a mix of Bitcoin exposure and income generation. By using a covered call strategy, it appeals to those interested in the potential high income from Bitcoin's volatility, without the need for direct investment in the cryptocurrency."

Mazza said covered calls are an important strategy as it gives investors a way to generate income from investments.

"This strategy can be particularly effective in volatile assets like Bitcoin, where price swings can provide opportunities for income generation through options premiums."

Related Link: EXCLUSIVE: Roundhill Investments Launches Generative AI ETF In Wake Of ChatGPT Growth – Here Are The Key Holdings

Why It's Important: Roundhill has been first to market with several thematic ETFs, including those targeting sports betting, the metaverse and the Magnificent 7 stocks. Several of the themes have led to other entries by ETF companies, which could show validation for Roundhill's thematic approach to investing.

"Given the uniqueness of YBTC and the growing interest in cryptocurrency-related investment products, it's likely that other companies might introduce similar covered call Bitcoin ETFs in the future, following Roundhill's first-to-market approach with this type of product," Mazza told Benzinga.

Mazza said the new Bitcoin-themed ETF will be successful if it can generate regular income for investors and provide a "unique blend of exposure to Bitcoin and traditional income generating strategies."

As for what's next for Roundhill, Mazza couldn't comment outside of what's publicly available but invited investors to check out the "Coming Soon" section of the Roundhill website. A quick look shows a Nasdaq 100 0DTE Covered Call Strategy ETF (QDTE) and S&P 500 0DTE Covered Call Strategy ETF (XDTE) in the works.

According to the Roundhill website, the company's largest ETFs are:

Roundhill Ball Metaverse ETF METV: $431 million assets under management (AUM)

Roundhill Sports Betting & iGaming ETF BETZ: $96 million AUM

Roundhill Generative AI & Technology ETF CHAT: $70 million AUM

Roundhill Magnificent Seven ETF MAGS: $57 million AUM

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