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Collect Yield from Bitcoin's Potential Swing Higher
Bitcoin has been through a classic shakeout.
After a strong 2025 run, the market hit turbulence into year-end, with BTC sliding into the mid-$80,000s in mid-December (with a session low around $84,490 on Dec. 18, 2025 per historical pricing data) before rebounding. Today (Jan. 6, 2026), Bitcoin is trading around $92,219.
That snapback is happening alongside a notable shift in positioning: U.S. spot Bitcoin ETFs have started to see meaningful inflows again, including roughly $1.2 billion over the first two trading days of 2026, a sign that institutional demand may be reasserting itself after a soft patch.
Of course, investors who want exposure can always buy Bitcoin directly, consider miners, or use proxies like Strategy (MSTR). But there's another approach that is increasingly popular during periods of volatility and choppy price action:
Use covered-call Bitcoin ETFs to pursue income while still keeping some exposure to upside.
The core idea is straightforward:
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These funds own (or reference) Bitcoin exposure through exchange-traded products or futures-based instruments.
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They sell call options against that exposure.
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The option premiums collected can be distributed as regular cash payouts (often high in volatile markets).
This matters because Bitcoin's volatility—normally viewed as a drawback—can become the "fuel" for income generation in a call-writing strategy.
The trade-off (and it's important)
Covered-call income is not "free yield."
A call-writing strategy typically involves two key trade-offs:
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Upside can be capped.
If Bitcoin surges sharply, the short calls can limit how much of that move flows through to the ETF.
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Downside still exists.
If Bitcoin falls, option premiums can cushion the decline to a degree, but they don't eliminate drawdowns.
In other words, these ETFs can be particularly attractive when you expect range-bound trading, a grind higher, or a stair-step recovery—but they may lag in an explosive melt-up.
With that framework, here are two Bitcoin-income ETFs that stand out for investors who want to collect distributions while staying in the game.
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Company: NEOS Bitcoin High Income ETF (SYM: BTCI)
BTCI is designed to generate monthly income by writing call options tied to Bitcoin exposure, aiming to provide a higher distribution profile while still maintaining participation if Bitcoin rises. According to NEOS, the fund seeks to distribute monthly income generated from writing call options on Bitcoin futures ETFs and provides exposure through Bitcoin ETPs.
Key metrics (as of 12/31/2025 on the sponsor site):
A quick note on terminology: distribution rate can be eye-catching, but it is not the same thing as total return, and it can vary materially over time. NEOS also includes disclosure language explaining that distribution rate assumes the most recent distribution persists, and it does not represent total return.
Recent distribution examples (BTCI)
BTCI has paid consistently on a monthly schedule, with recent payouts including:
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$0.9967 per share payable Dec. 26, 2025
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$1.0181 per share payable Nov. 28, 2025
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$1.2999 per share payable Oct. 24, 2025
NEOS also notes that distributions may be classified as return of capital and can be comprised of option premiums, dividends, capital gains, and interest payments.
Why BTCI can make sense here
If Bitcoin stabilizes and continues a "two steps forward, one step back" recovery, BTCI's structure can potentially:
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Monetize volatility via option premiums
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Deliver a steady monthly payout cadence
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Provide a less emotionally demanding way to stay exposed versus trading every Bitcoin swing
As of today, BTCI is trading around $45.87.
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Company: Grayscale Bitcoin Covered Call ETF (SYM: BTCC)
BTCC is Grayscale's covered-call income product. The fund explicitly states that it is designed to maximize income generation through covered call writing on Bitcoin ETPs as the underlying reference asset, and it also specifies that it will not invest in digital assets directly, instead using derivatives on exchange-traded vehicles.
Key metrics (as of 01/05/2026 on the sponsor site):
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Total expense ratio: 0.66%
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Distribution frequency: Biweekly (targets pay dates on the 15th and 30th)
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Distribution rate: 59.36%
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30-day SEC yield: 3.24%
Again, it's critical to keep definitions straight. Grayscale's materials explicitly note that distribution rate is based on prior distributions and does not represent total return, and their 19a-1 disclosure indicates the distribution can be return of capital.
Recent distribution examples (BTCC)
From Grayscale's published distribution table, recent distributions include:
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$0.5341 per share payable Dec. 30, 2025
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$0.5507 per share payable Dec. 15, 2025
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$0.5650 per share payable Nov. 28, 2025
As of today, BTCC is trading around $22.15.
Why BTCC can make sense here
BTCC's twice-monthly cadence can be attractive for investors who value:
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More frequent distributions
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A covered-call structure that can perform well in sideways-to-up markets
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An easier "set-and-monitor" approach compared with actively trading Bitcoin
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