VistaShares has introduced BTYB, a new exchange-traded fund (ETF) now trading on the New York Stock Exchange. This actively managed ETF predominantly invests in U.S. Treasury securities while employing options strategies to offer investors exposure to Bitcoin price movements along with generating weekly income.
The announcement made on Tuesday reveals that about 80% of the fund's portfolio consists of U.S. Treasury assets, with the remaining 20% providing Bitcoin exposure through a synthetic covered call approach. Specifically, BTYB utilizes call options on BlackRock’s iShares Bitcoin Trust (IBIT) to achieve its Bitcoin-linked exposure.
A synthetic covered call strategy involves using derivatives to simulate Bitcoin price exposure and selling call options to earn income, rather than directly holding Bitcoin. This method allows BTYB to offer increased income potential through options premiums, albeit with limited upside potential, as it does not track the spot price of Bitcoin.
VistaShares, known for its actively managed funds that leverage options strategies and thematic investments, aims for the ETF to yield about twice the return of five-year Treasuries. However, these distributions are subject to change based on market conditions and interest rates.
The launch of BTYB reflects a broader trend among ETF issuers in the U.S., who are venturing beyond single-asset crypto products. This expansion includes ETFs that combine Bitcoin with other assets or crypto baskets, showcasing innovative approaches in the sector.
In recent developments, the U.S. Securities and Exchange Commission approved two spot crypto index ETFs. These include Hashdex’s Nasdaq Crypto Index US ETF and Franklin Templeton’s Franklin Crypto Index ETF, both incorporating spot Bitcoin and Ether and tracking associated crypto index benchmarks.
Furthermore, Bitwise Asset Management recently launched the Bitwise Proficio Currency Debasement ETF, which includes Bitcoin, precious metals, and mining equities, aiming to counteract fiat currency devaluation.
ETFs that cover a wider array of cryptocurrencies are gaining popularity. For instance, Hashdex has expanded its Crypto Index US ETF to include XRP, Solana, and Stellar, alongside Bitcoin and Ether. Meanwhile, 21Shares has introduced two U.S.-regulated cryptocurrency index ETFs, which track FTSE Russell indexes and encompass a range of large-cap digital assets.
These developments highlight the evolving landscape of crypto-related ETFs, as issuers continue to innovate and diversify their offerings in response to market demands.