Roundhill Files for a Bitcoin Covered Call ETF
According to a post released by Eric Balchunas, senior ETF analyst at Bloomberg, Roundhill, a financial player registered with the SEC, has applied for a Bitcoin-covered call ETF. This puts Roundhill alongside BlackRock as the two most renowned names in the market of Bitcoin ETFs.
Roundhill’s BTC Covered Call Strategy ETF
Roundhill Investments, a SEC-registered financial advisor dedicated to providing cutting-edge exchange-traded funds (ETFs), has applied for a Bitcoin Covered Call Strategy ETF. They have also registered an Ethereum futures ETF in addition to VanEck and Volatility Shares. This recent application would hold an ETF for Bitcoin futures and then write calls and put options to generate revenue.
By choosing ETH futures over the Spot BTC ETF alternative, Roundhill may be trying to strengthen its metaverse expertise or gain a first-mover advantage.
What Is A Bitcoin Covered Call ETF?
A Bitcoin covered call ETF is a strategy where you sell a call option on your BTC holdings, giving you the option to buy the underlying Bitcoin ETF at a specific price in the future. This strategy generates passive income similar to rent and is mildly bullish for near-term upside in Bitcoin price.
BlackRock Steps Up In the BTC Spot ETF Game
BlackRock has applied for a buy-write ETF with a small capitalization on the Russell 2000. This ETF provides investors exposure to a diverse portfolio of small-market capitalization firms by tracking the performance of the Russell 2000 Index. The Russell 2000 tracks about 2,000 US small-cap firms.
SEC’s Present Approach
SEC Chair Gary Gensler revealed that the Securities and Exchange Commission is examining 8-10 applications for an official Bitcoin exchange-traded fund. The increase in Bitcoin’s value has raised stakeholder expectations. The SEC is conducting a thorough review of these applications to ensure compliance with regulations.
Hot Take: Competition Heats Up in the Bitcoin ETF Market
The race to launch Bitcoin ETFs continues as Roundhill and BlackRock join the fray. Roundhill’s application for a Bitcoin covered call ETF shows their desire to generate revenue from Bitcoin futures. On the other hand, BlackRock aims to provide exposure to small-market capitalization firms through their buy-write ETF on the Russell 2000.
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