BlackRock Launches Bitcoin Income ETF with High-Teens Yield Target

**Jennifer Sanasie** (0:00)
BlackRock's newest exchange traded fund, the Bitcoin Income Premium Fund, opened for trade today. I'm joined by BlackRock's global head of digital assets, Robbie Mitchnick. Robbie, how's it going?

**Robert Mitchnick** (0:11)
Great, nice to see you.

**Jennifer Sanasie** (0:12)
Nice to see you too, a big day. Talk to me about why this product is the right next evolution for Bitcoin funds.

**Robert Mitchnick** (0:20)
Sure, well, this is part of our broader crypto ETF suite, obviously. And Bitcoin continues to be front of mind for lots of our clients, even through the downturn that has happened the last eight months. And what this product does is enables you to generate an income yield on top of Bitcoin exposure. And so we've had lots of clients who may have been open to Bitcoin, but they've been hesitant because they're very yield focused and Bitcoin doesn't intrinsically pay yield, or they're a little bit more conservative. So what this does is enables that generation of yield also dampens the volatility a little bit.

**Jennifer Sanasie** (0:59)
You talk about clients who are yield focused. Why didn't they maybe look at staking products? Why are they focused on Bitcoin? Talk to us a little bit about those conversations.

**Robert Mitchnick** (1:10)
Sure. Well, staking is something that's become interesting to a lot of our clients as well, and that's why we launched Ethereum with staking in March.
Now with ETH, we're talking about staking yield that's typically in the 2-3 percent range. This is a different product, different numbers, looking at, in this case, roughly 70 percent upside retention in Bitcoin at this target, plus a high teens target income yield, so of a really different magnitude and scale than what you're seeing on the staking side.

**Jennifer Sanasie** (1:44)
Talk to me about the type of investor this product is for.

**Robert Mitchnick** (1:48)
Well, we think it's going to appeal to a number of different segments, just as iBit has been tremendously popular across the investor spectrum.
There's a lot of investors on the retail side, certainly, who are attracted to the idea of Bitcoin, but also having yield alongside it. There are a number of financial advisors who may be the slightly more conservative, plus yield generation. Nature of this appeals more to them than just straight iBit. And even institutional investors, you think about institutions like pension funds or insurers, others who are very yield focused, and that's been maybe the primary objection to not allocating to Bitcoin to date. So we think really across the gamut, it's going to have resonance.

**Jennifer Sanasie** (2:30)
What type of market do you expect to bid at to outperform iBit in or just perform well in?

**Robert Mitchnick** (2:36)
Yeah, it's a great question. So to put it simply, if Bitcoin goes down, bid would be expected to outperform iBit or Bitcoin. If Bitcoin is flat, same thing. If Bitcoin is up modestly, again, we'd expect bid to outperform. It's when Bitcoin is up significantly that actually we would expect it to net underperform. But we're talking 50, 60, 100% type returns before you start to get that turnover point where actually you'd have rather been in Bitcoin or iBit. And I think a lot of investors, if that happens, will probably be pretty happy regardless.

**Jennifer Sanasie** (3:09)
Now, some critics argue that covered call strategies often work best when markets are sideways. Is this product maybe an indicator as to how BlackRock is thinking the market might be for the next little while?

**Robert Mitchnick** (3:22)
No, I wouldn't interpret it that way. We've had this in the works for quite some time.

**Jennifer Sanasie** (3:26)
Alright, thanks so much for joining us today on the floor of the New York Stock Exchange. That was Robbie Mitchnick, BlackRock's Global Head of Digital Assets.