BlackRock, an asset manager that administers $14 trillion in assets, launched a new Bitcoin ETF called BITA on Tuesday (16). Unlike IBIT, its goal is to generate monthly income through an options operation, in addition to exposure to the cryptocurrency's price.

Given the size of BlackRock and the success of its previous ETF, currently the largest in the crypto market, the expectation is that the new fund will attract even more capital to Bitcoin.

At the time of writing, Bitcoin is trading at US$66,000, down slightly by 1% in the last 24 hours.

Understand BlackRock's new Bitcoin ETF.

In short, the iShares Bitcoin Premium Income ETF (BITA) will gain exposure to Bitcoin through IBIT, another BlackRock ETF, but will sell call options on these holdings, representing between 25% and 35% of the portfolio, to generate income that will be distributed monthly to fund holders.

Therefore, investors will have approximately 65% ​​to 75% exposure to the price of Bitcoin. Meanwhile, a strategy of selling options, based on other similar products, could generate something in the range of 0.5% to 1.5% per month for the portfolio.

Bitcoin's volatility is the factor that will weigh most heavily on these returns.

Robert Mitchnick, head of digital assets at BlackRock, explains that the launch of BITA aims to meet the demand of its clients who are interested in Bitcoin, but maintains a greater focus on income generation.

"BITA was developed in response to this demand, allowing investors to maintain the majority of their exposure to the rise in bitcoin while capturing potential income through a convenient exchange-traded structure."

The announcement further indicates that BITA investors will also be able to benefit from tax advantages, including the possibility of carrying over capital losses to offset other investment gains, among other points.

BlackRock's Bitcoin ETF remains the largest on the market, but it's bleeding.

At its peak, BlackRock held over 822,000 bitcoins in custody with IBIT. Currently, the ETF holds approximately 793,000 bitcoins in its wallets.

As can be seen in the chart below, the fund has experienced large daily outflows in recent weeks.

IBIT, BlackRock's Bitcoin ETF, has seen large daily outflows in recent weeks, mirroring Bitcoin's decline during that period. Source: SoSoValue.

Regardless, long-term growth is expected, and the launch of BITA could help the asset manager acquire clients.