Roundhill Files for A Bitcoin Covered Call ETF, What’s That Exactly?

As the developments around spot Bitcoin ETF approval catches steam, more and more players are willing to join the bandwagon. Bloomberg’s senior ETF analyst Eric Balchunas stated that the SEC-registered financial player Roundhill has filed for a Bitcoin-covered call ETF.

A New Bitcoin ETF in the Market?

Roundhill has recently submitted an application for a Bitcoin Covered Call ETF, which will comprise a bitcoin futures ETF and engage in the writing of call and put options to generate income. Roundhill Investments is a registered investment advisor under the SEC, specializing in providing groundbreaking ETF solutions.

Roundhill just filed for a Bitcoin Covered Call ETF, which will hold a bitcoin futures ETF and then write call and put options for income pic.twitter.com/0yqsAOXqX5

— Eric Balchunas (@EricBalchunas) October 27, 2023

It is clear that financial players have been exploring ways to offer Bitcoin exposure to their institutional clients. Responding to Blachunas’ tweet, crypto market enthusiasts that the SEC should be coming up with clear regulations allowing people to directly buy the BTC.

SEC’s reluctance to spot Bitcoin ETF has forced financial institutions to create a workaround by launching other products such as the Bitcoin futures ETF, etc. However, the crypto community desires an ETF that allows users to directly hold Bitcoins.

Current ETF Developments

The BTC price has given a strong rally to $35,000 amid the positive developments around the Bitcoin ETF approval, expected within the next few months. Despite the partial retracement, the Bitcoin price has also been holding well up to the $34,000 level.

SEC Chair Gary Gensler has affirmed that the commission is reviewing 8-10 applications for a physical Bitcoin ETF. These disclosures, reflecting a possible transformation in the market, coincide with a remarkable surge in Bitcoin’s value, amplifying expectations from stakeholders. Furthermore, he emphasized the meticulous scrutiny the staff is applying to these applications, emphasizing the regulatory body’s comprehensive review process.

Analysts have a mixed review on how the BTC price shall react after the ETF approval. Some believe that the Bitcoin rally has been already priced in for the upcoming ETF. On the other hand, others believe that capital from Gold will flow into Bitcoin ETF after the SEC approval.