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Roundhill’s YBTC Merges Bitcoin ETF with Call Options

Roundhill launches YBTC, a Bitcoin ETF with a covered call strategy on CBOE, merging crypto dynamics with traditional finance.
Roundhill’s YBTC Merges Bitcoin ETF with Call Options

Roundhill Investments, a key player in the ETF industry, has launched its new Bitcoin ETF, trading under the ticker YBTC. Debuting on the Chicago Board Options Exchange (CBOE), this actively managed fund aims to reflect the performance of Bitcoin, primarily through investment in the ProShares Bitcoin Strategy ETF (BITO). YBTC stands out for incorporating a covered call strategy, which aligns with the growing interest in combining cryptocurrency investments with traditional financial instruments.

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Roundhill’s YBTC Covered Call Strategy

YBTC employs a distinctive approach by selling out-of-the-money (OTM) call options on BITO. This method generates additional income while placing a cap on the maximum potential gains from Bitcoin’s price movements. Selling OTM call options involves setting strike prices above Bitcoin’s current market price, allowing YBTC to earn premiums from these options. This approach is a fundamental aspect of the covered call strategy, providing revenue for the fund regardless of the underlying asset’s market direction.

This strategy introduces a nuanced risk profile. While it offers an additional income stream, it also potentially limits the fund’s gains compared to Bitcoin’s direct market performance. This aspect is crucial for investors to consider, as it differentiates YBTC from other Bitcoin investment vehicles that aim for a direct correlation with the cryptocurrency’s market movements.

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YBTC: A Gateway for Investors into Bitcoin

The primary goal of YBTC is to offer investors a pathway to participate in the dynamics of Bitcoin, which maintains its position as the leading cryptocurrency by market capitalization. The covered call strategy employed by YBTC is designed to produce a consistent monthly income, making it an attractive option for investors looking for regular returns.

By integrating a covered call strategy with a Bitcoin ETF, YBTC allows investors to engage in the cryptocurrency market with a unique risk-reward balance. The fund seeks to distribute returns, where possible, every month, aligning with its aim of income generation. This structure allows investors to benefit from Bitcoin’s price movements, albeit with a limit on the potential upside.

Read Also: Dogecoin (DOGE) Listed on Top Indian Exchange, DOGE to Rally?

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Kelvin Munene Murithi

Kelvin Munene is a crypto and finance journalist with over 5 years of experience, offering in-depth market analysis and expert commentary . With a Bachelor's degree in Journalism and Actuarial Science from Mount Kenya University, Kelvin is known for his meticulous research and strong writing skills, particularly in cryptocurrency, blockchain, and financial markets. His work has been featured across top industry publications such as Coingape, Cryptobasic, MetaNews, Cryptotimes, Coinedition, TheCoinrepublic, Cryptotale, and Analytics Insight among others, where he consistently provides timely updates and insightful content. Kelvin’s focus lies in uncovering emerging trends in the crypto space, delivering factual and data-driven analyses that help readers make informed decisions. His expertise extends across market cycles, technological innovations, and regulatory shifts that shape the crypto landscape. Beyond his professional achievements, Kelvin has a passion for chess, traveling, and exploring new adventures.

Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
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