BlackRock's Bitcoin Income ETF Fails to Offset Most of $1.2M Losses

BlackRock's iShares Bitcoin Premium Income ETF (BITA) has been in operation for just over a month, and its first quarterly filing shows it has already taken significant losses on its Bitcoin holdings. The fund posted an $860,335 decrease in net assets from operations through June 30, with unrealized losses of $782,203 on Bitcoin and $417,644 on the iShares Bitcoin Trust ETF (IBIT).

The ETF's option gains did help to offset some of these losses, generating $344,849 in combined realized and unrealized gains. However, this only managed to offset about 28.7% of the total $1.2 million in losses.

BITA's prospectus targets written-call notional equal to 25% to 35% of its net asset value (NAV). Selling these calls produces premiums that can help offset losses, but the covered holdings retain their downside exposure while surrendering gains above the options' exercise prices.