A new crypto ETF in the U.S. is attracting investor interest, signaling growing appetite for diversified digital asset exposure beyond traditional single-asset products.

Launched on June 17, the Nicholas Crypto Income ETF (ticker: BLOX) offers a unique blend of digital asset investments and options income strategies. Since its debut, the fund has seen net inflows of approximately $4.52 million, pushing total assets under management close to $4.9 million, according to data from VettaFi and the fund’s own website.

“The options income space is almost becoming its own asset class,” said David Nicholas, CEO of XFUNDs, in an interview with CoinDesk. He noted the fund is capturing attention from yield-seeking retail investors eager for crypto exposure with income potential.

A Three-Pronged Strategy

BLOX, launched in collaboration with Tidal Investments LLC, takes a three-sleeve approach:

• Equity Sleeve: The fund invests in publicly traded companies tied to the crypto industry, such as firms operating in blockchain technology or holding digital assets on their balance sheets.
• Crypto ETF Sleeve: BLOX allocates funds to bitcoin and ether ETFs and retains flexibility to expand into other digital assets through future regulated vehicles. As of Thursday, top holdings included BlackRock’s spot Ethereum ETF, Coinbase, Nvidia, Marathon Digital (MARA), and Core Scientific, among others. This diversified mix ensures that BLOX’s performance isn’t solely dependent on bitcoin’s price movements.
• Options Sleeve: The fund generates additional income through options strategies. It writes call and put spreads tied to its crypto ETF holdings and selectively writes covered calls or put spreads on its equity investments.

“We own about 11 businesses that we believe will benefit from appreciation in Bitcoin or Ether, but they aren’t crypto tokens themselves,” Nicholas explained. “Investors get exposure to both digital assets and publicly traded companies with revenue and growth potential. That combination makes this fund quite unique.”

Harnessing Options for Extra Yield

Options-writing strategies are a key part of BLOX’s income generation. Selling options is similar to collecting a premium for insuring against market movements, providing the fund with upfront income.

In particular, writing put spreads allows the ETF to earn premiums as underlying assets rise in value, adding to its returns. BLOX trades options tied to spot crypto ETFs, including contracts linked to BlackRock’s spot bitcoin ETF (IBIT).

For example, shares of Coinbase—one of BLOX’s top holdings—climbed more than 14% in the final week of June. Thanks to BLOX’s multi-layered strategy, the fund benefited both from the stock’s price rally and from income earned through options positions. Core Scientific, another holding, saw a similar surge of about 15% recently.

“That’s what’s great about put spreads—there’s no cap. A put spread is a long, bullish options position,” Nicholas said. BLOX distributes income from options premiums and dividends on equity holdings to investors on a weekly basis.

While crypto investors have long been using options strategies like put spreads and high-strike calls on offshore platforms like Deribit, these yield-focused tactics are gaining popularity in the ETF space and among equity market participants as well.

Potential for Altcoin Exposure

Looking ahead, BLOX could expand its portfolio to include other major cryptocurrencies if regulatory approval allows.

“Once the SEC approves other products—like the proposed Solana ETF—we can file an amendment to add them into our fund,” Nicholas noted. “We wouldn’t need a separate ETF. Because BLOX is designed as a broad crypto exposure fund, we’d simply adjust the existing structure to include new assets.”