BlackRock Doubles Down: Files for Bitcoin Yield ETF as Direct IBIT Successor

BlackRock just fired the next shot in the Bitcoin ETF arms race.

The asset management titan filed paperwork for a Bitcoin Yield ETF—positioning it as the direct sequel to its record-breaking IBIT fund. This isn't just another filing; it's a strategic move to capture the next wave of institutional demand.

From Spot to Yield: The Natural Progression

After dominating the spot Bitcoin ETF market, BlackRock's pivot to yield generation signals where the smart money sees the next frontier. The filing outlines a structure that aims to generate income from Bitcoin holdings—something traditional finance has struggled to deliver with digital assets.

Why This Changes the Game

Most Wall Street firms are still trying to figure out their first Bitcoin product while BlackRock is already launching its second act. The yield-focused approach addresses the biggest criticism from institutional skeptics: "What's the cash flow?" Now there's an answer.

This puts pressure on every other asset manager playing catch-up. When the world's largest ETF provider makes consecutive bets on Bitcoin, it's not a trend—it's the new baseline.

The Institutional Floodgates

Pension funds, endowments, and conservative portfolios that need yield justification now have their gateway. BlackRock's move effectively bridges the last gap between Bitcoin and traditional portfolio requirements.

Of course, the same Wall Street banks that called Bitcoin worthless last year will now be first in line to underwrite the offering—because nothing generates fees like embracing what you once mocked.

BlackRock isn't just participating in crypto; they're systematically building the infrastructure for full institutional adoption. The IBIT sequel might just outperform the original.

BlackRock seeks bitcoin yield

According to Bloomberg ETF analyst Eric Balchunas, the new fund WOULD employ a covered call strategy on Bitcoin futures, selling options to collect premiums and generate regular yield for investors.

However, this approach trades away some of the potential upside from direct Bitcoin exposure, as investors exchange growth for consistent income.

Balchunas explained:

“This is a covered call Bitcoin strategy in order to give BTC some yield. This will be a ’33 Act spot product, sequel to the $87b $IBIT.”

Regulatory process and growing bitcoin ETF market

Registering a Delaware trust is typically a precursor to submitting an S-1 or 19b-4 filing with the Securities and Exchange Commission (SEC), formally starting the approval process.

The SEC has recently shown more openness to bitcoin investment products, particularly following the popularity of BlackRock’s IBIT ETF, which has attracted over $60.7 billion in inflows since January 2024.

The Fidelity Wise Origin Bitcoin Fund (FBTC) is the next largest, with $12.3 billion.

Yield products emerge for bitcoin

Traditionally, many institutional investors overlooked bitcoin due to its lack of native yield.

However, new solutions are appearing, such as Strategy’s STRK, a convertible preferred stock offering that leverages its bitcoin holdings to provide income.

If approved, BlackRock’s Premium Income ETF would join a small but growing set of yield-generating bitcoin products in the U.S.

Focus remains on bitcoin and ether

Balchunas noted that despite a surge in ETF filings for various altcoins, BlackRock appears focused on building around bitcoin and ether, opting not to participate in the broader altcoin ETF trend for now.