Grayscale unveils updated covered call ETFs for Bitcoin and Ethereum
Grayscale Investments has submitted updated proposals for Bitcoin and Ethereum Covered Call ETFs to the SEC. These funds aim to generate income through options contracts linked to Grayscale's Bitcoin and Ethereum ETPs, including the Grayscale Bitcoin Trust and Grayscale Ethereum Trust. The Bitcoin ETF will invest at least 80% of its net assets in Bitcoin ETPs and related options, while the Ethereum ETF will follow similar guidelines. Unlike traditional crypto funds, these ETFs will not directly hold Bitcoin or Ethereum but will use exchange-traded instruments and derivatives. Covered call ETFs generate revenue by selling call options, providing steady income and some downside protection, but limiting potential gains. Grayscale's initiatives reflect its history of advancing crypto ETFs, contributing to the growth of spot Bitcoin ETFs in the US market. The firm is also transitioning its Digital Large Cap Fund into an ETF and has introduced trusts for various digital assets.
