Controversy over BlackRock Bitcoin Yield ETF Intensifies; Strategy Design May Have Flaws and Could Underperform BTC in the Long Term

ChainCatcher reports that 10x Research analysis indicates that BlackRock's Bitcoin yield-enhanced exchange-traded fund, BITA, may have a flaw in its strategy design. By generating returns through selling call options, it could, in most market conditions, cause investors to underperform spot Bitcoin and may not achieve the desired absolute returns.

10x Research believes that BITA implements a systematic monthly call-selling strategy according to fixed rules, regardless of whether Bitcoin rises, consolidates, or falls. This might force investors to make unfavorable compromises between yield and upside potential. In contrast, their proposed framework emphasizes “timing and conditional execution,” capturing option premiums only when market conditions are favorable. Bitcoin's high volatility mainly stems from information asymmetry among market participants and a highly marketed environment. For a long time, many investors have tried to capture this volatility premium using systematic strategies, but most have been unsuccessful.