BlackRock is pressing further into the crypto ETF market with a proposal for a bitcoin income fund that uses options to generate yield.

The asset management giant, which oversees about $12.5 trillion in assets, has filed a Form S-1 with the U.S. Securities and Exchange Commission to list the iShares Bitcoin Premium Income ETF. The product is designed to provide investors with income while preserving exposure to bitcoin.

According to the filing, the ETF would actively manage bitcoin exposure either directly or through holdings in BlackRock’s iShares Bitcoin Trust (IBIT). Income would be generated by selling call options on that exposure, employing a covered-call strategy that collects option premiums in exchange for limiting some upside potential.

Covered-call strategies are a staple of equity income funds and have already been applied in crypto-focused ETFs. BlackRock’s move is notable given the scale of its operations and the dominance of IBIT, which has grown into the largest spot bitcoin ETF with more than $69.7 billion in assets, based on SoSoValue data. Bitcoin ETFs have also emerged as a key revenue driver for the firm.

The proposed fund has yet to disclose a ticker symbol or expense ratio. It would actively manage its options strategy and distribute the resulting premiums to investors as income, a structure that typically prioritizes yield over capital appreciation.

Several bitcoin income ETFs already employ similar strategies, including the Roundhill Bitcoin Covered Call Strategy ETF (YBTC), the Amplify Bitcoin Max Income Covered Call ETF (BAGY) and the NEOS Bitcoin High Income ETF (BTCI). While these products often advertise high distribution rates, those payouts can erode net asset value, sometimes through returns of capital. YBTC currently reports a 35.87% distribution rate, while BTCI and BAGY show rates of 27.25% and 37.1%, respectively.

Performance has also lagged the underlying asset. Over the past year, BTCI has fallen about 31.3% and YBTC has dropped 45%, compared with bitcoin’s roughly 14% decline over the same period. BAGY, which launched in late April 2025, is down about 25% since inception.