• Grayscale launches BTCC and BPI ETFs to capitalize on Bitcoin’s price volatility.
• Bitcoin ETFs saw $218.1M inflows despite BTC’s 1.67% decline to $83,706.40.

Grayscale Investments has expanded its cryptocurrency offerings with the launch of two new Bitcoin [BTC]-focused exchange-traded funds (ETFs) designed to capitalize on market volatility.

Announced on the 2nd of April, the Grayscale Bitcoin Covered Call ETF (BTCC) and the Grayscale Bitcoin Premium Income ETF (BPI) aim to generate revenue by leveraging BTC’s price fluctuations.

Remarking on the same, the press release noted,

“Both strategies may be considered as an alternative income stream that’s less correlated to traditional income-oriented investments.“

What are Grayscale’s new Bitcoin ETFs designed for?

Grayscale’s newly launched Bitcoin ETFs take distinct approaches to income generation and capital appreciation.

The Bitcoin Covered Call ETF (BTCC) aims to generate steady returns by selling call options near Bitcoin’s spot price, allowing investors to collect option premiums while mitigating downside risks.

However, this strategy limits potential gains if Bitcoin’s price surges beyond the strike price. 

Grayscale noted,

“By selling calls near spot prices, BTCC seeks to deliver a principal focus on income generation. This makes BTCC an income-first strategy, potentially ideal for investors seeking regular cash flows and high yielding opportunities.”

Meanwhile, the Bitcoin Premium Income ETF (BPI) prioritizes long-term appreciation by writing call options with significantly higher strike prices, offering greater upside potential but lower dividend income.

Grayscale added,

“This blended approach provides investors with an opportunity to participate in the capital appreciation potential of Bitcoin with the benefits of income.” 

These contrasting strategies cater to investors with varying risk appetites and market outlooks.

Grayscale’s ETF growth so far and roadmap ahead

Grayscale’s aggressive expansion in the ETF market comes at a pivotal moment for Bitcoin, which recently dipped to $83,706.40 after a 1.67% decline in 24 hours, according to CoinMarketCap.

Despite this downturn, Bitcoin ETFs saw a notable inflow of $218.1 million, although Grayscale’s GBTC recorded no new flows, as reported by Farside Investors.

That being said, the firm continues to push for broader ETF adoption, filing for a multi-asset crypto ETF and awaiting regulatory approval for spot ETFs tied to Ripple [XRP], Cardano [ADA], Solana, and Litecoin [LTC].

In fact, the U.S. SEC has formally recognized Grayscale’s 19b-4 filing for a spot Dogecoin ETF.

Meanwhile, Nasdaq’s recent filing with the SEC for a Grayscale Avalanche ETF underscores the company’s commitment to expanding its crypto investment offerings.