DJ Shaw
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Cboe Global Markets Inc. (CBOE) launched new spot Bitcoin ETF BuyWrite indices last week, offering investors covered call strategies designed to generate income from cryptocurrency exposure while managing volatility.
The introduction of these Bitcoin ETF indices represents a new approach for investors seeking cryptocurrency exposure with income generation potential, as traditional buy-and-hold Bitcoin strategies face increased volatility, according to a press release from the firm.
The exchange operator introduced three indices tracking different Bitcoin ETF covered call strategies, according to the announcement. The BXGBTCA index, which writes monthly call options, delivered a 25.3% annualized return compared to a loss of 10.6% for the underlying Bitcoin ETF benchmark, the Grayscale Bitcoin Trust ETF (GBTC), according to performance data from November 2024 through April 2025.
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Powered by Money.com - Yahoo may earn commission from the links above.Cboe's BXGBTCA index also reduced annualized volatility to 39.7% versus 50.7% for the GBTC benchmark, according to the report. The covered call approach generated monthly option premiums averaging 5.5%, calculated as the bid price of short call options divided by the closing price of underlying assets.
The BXGBTCT index, writing calls on roll days, recorded a 9.2% annualized loss with 53.7% volatility over the same period, according to the data. Maximum drawdowns reached 29.2% for BXGBTCT compared to 28.5% for the benchmark GBTC.
Monthly option yields for the BXGBTCA strategy peaked at around 7% in January 2025, while BXGBTCT yields reached just under 2% during the same month, according to the release. The performance difference stems from the timing of option-writing relative to Bitcoin ETF price movements.
Cboe positioned the indices as tools for navigating cryptocurrency volatility while seeking income through covered call premiums, according to the release. The launch follows growing demand for sophisticated crypto-linked investment solutions as digital asset markets continue to evolve.
The indices build on existing derivatives-based cryptocurrency products as more investors seek structured digital asset exposure, according to Cboe. The exchange operator views the launch as part of efforts to broaden cryptocurrency investment options beyond traditional buy-and-hold approaches.
