Crypto sentiment among advisors improved dramatically in the wake of the 2024 presidential election, according to an annual survey conducted by Bitwise and VettaFi. In such an environment of growing crypto optimism, advisors reported increased interest in bitcoin income strategies.
Bitwise Asset Management and VettaFi recently conducted their annual Crypto Survey of advisors. The survey, done between November and December 2024, included 430 advisors across a wide range of AUM thresholds and advisory types. Of those surveyed, 57% reported a likelihood of increasing their crypto investments due to the results of the 2024 election.
Notably, 17% of advisors surveyed reported wanting to invest in bitcoin income (covered call) strategies. And regarding crypto investing, an overwhelming 71% of advisors preferred ETFs for their exposure.
The NEOS Bitcoin High Income ETF (BTCI), launched last October, continues to draw steady inflows from investors. The actively managed fund is seeks to generate monthly income through its covered call strategy while providing exposure to spot bitcoin through exchange traded products. The ETPs that the fund invests in hold BTC and track its price performance before fees and expenses.
BTCI currently offers a distribution rate of 28.17% as of December 31, 2024. Distribution rate annualizes the most recent distribution and then divides by the fund’s NAV.
The fund invests in bitcoin futures ETFs and options contracts that use BTC futures ETFs for their reference asset. This creates synthetic exposure to BTC through BTC futures while also writing covered call options on BTC futures ETFs to generate high monthly income. The strategy uses a rules-based, systematic, proprietary model to determine its options positions.
Covered call options entail buying an asset while also writing a call on the underlying asset. This generates a premium but also caps the upside potential should the underlying asset appreciate. Options strategies like BTCI often benefit from volatility, earning higher premiums on call writing (and thereby income) when volatility spikes. Given bitcoin’s enhanced volatility, it could prove an attractive source of additional income for BTC investors.
The fund’s managers may also engage in tax-loss harvesting to capture losses in order to offset gains made.
BTCI has an expense ratio of 0.98%.
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