On June 4th, 2025, we listed the Global X Bitcoin Covered Call ETF on the Cboe BZX Exchange. BCCC is the latest addition to Global X’s covered call and growth ETF suite, and it is designed to offer investors the opportunity to indirectly participate in the price performance of bitcoin ETPs (exchange-traded products), while seeking to harvest option premiums and manage volatility by selling call options on the same underlying security.
Bitcoin’s intrigue as an investment opportunity stems from a variety of factors, but whether investors choose to lean into its status as a decentralized currency, or simply view it as a speculative potential growth opportunity, the trajectory it has assumed over the last few years has been difficult to ignore. These days, new innovations in exchanges and products have made investing in bitcoin easier than ever. However, should investors wish to take positions, it’s likely they would still need to deal with the levels of volatility it has historically demonstrated. With wide price swings representing a potential deterrent, gaining indirect exposure to the price returns of bitcoin ETPs that provide exposure to bitcoin, while employing a call option writing strategy to exchange a portion of upside price appreciation potential for a stream of premiums, may represent an interesting value proposition.
Key Takeaways
- The Global X Bitcoin Covered Call ETF (BCCC) is an actively managed strategy that synthetically provides exposure to bitcoin ETPs, seeking to gain indirect exposure to the price returns of bitcoin.
- Every week, BCCC seeks to write call options against a portion of its notional holdings in an effort to harvest option premiums and perform distributions.
- By writing call options against only a portion of its bitcoin ETP exposure, BCCC maintains the potential ability to benefit from a portion of the gains that may be realized.
BCCC Offers Indirect Exposure to Bitcoin Within the Wrapper of an ETF
Investors have sought various means by which to gain exposure to bitcoin over the years. From mining bitcoin itself, to trading it on crypto exchanges and engaging with bitcoin trusts, access has become increasingly seamless and potentially more efficient. Benefits of the progression have included wider accessibility and liquidity. Most recently, the approval of spot bitcoin ETFs and ETFs that trade bitcoin futures have ushered in a new means by which to achieve this exposure.
The Global X Bitcoin Covered Call ETF seeks to achieve indirect exposure to the price returns of bitcoin by buying and selling options on bitcoin ETPs. Specifically, it utilizes long call options and short put options to obtain synthetic exposure to the price returns of these products.
For illustrative purposes only. Illustration assumes the options positions are made at-the-money and does not include the effect of the premiums paid or received for establishing the option positions. BCCC’s options positions may not always be made at-the-money, which could affect the correlation of the returns.
Gaining exposure to bitcoin ETPs in this fashion is potentially less expensive than buying the ETP outright, as options often cost less to purchase than the underlying vehicles they reference. It may also result in fund returns that deviate modestly from that of the underlying ETPs amid a weekly roll period. That said, upon the outcome period’s conclusion, returns are expected to converge to an approximate 1:1 rate.
The Fund Seeks to Provide Weekly Distributions, Utilizing a Systematically Active Approach
Although the Global X Bitcoin Covered Call ETF (BCCC) is an active investment strategy, a series of functions within the fund are aimed at remaining relatively consistent. For instance, portfolio managers will seek to write weekly call options that are at-the-money or slightly out-of-the-money, from which approximately 75% of the call premiums received are expected to be ultimately distributed to shareholders. Additionally, only a portion of the funds’ notional holdings are expected to be covered, on a roll-to-roll basis, which is designed to allow for upside price appreciation potential to be consistently pursued.
One of the important levers that BCCC engages to promote potentially higher premium values is weekly option writing. By writing options week after week, in succession, the fund may be able to generate larger premiums than it would by writing options with longer tenors (time until expiration). Options naturally lose value as they approach their expiration date, and this decay happens more rapidly during the final days before expiration. By repeatedly selling short-term weekly options, rather than longer-term options, the fund can potentially capture this accelerated value decrease more efficiently, allowing it to collect more premiums over time when compared to a strategy using longer-dated options.
In conjunction with the writing of weekly options, the Global X Bitcoin Covered Call ETF also aims to provide investors with a stream of weekly distributions. Each week, when call options are written, approximately 75% of the premium that is received from writing the call option is expected to be distributed to shareholders, while the balance of the premium is reinvested back into the fund. A distribution will offer investors the opportunity to pursue reinvestment or utilize the proceeds elsewhere. Meanwhile, any automatically re-invested premiums ought to provide a measure of support to the fund’s net asset value (NAV).
BCCC May Be Considered a Hedged Bitcoin Strategy
The Global X Bitcoin Covered Call ETF (BCCC) writes call options on bitcoin ETPs that are either at-the-money or slightly out-of-the-money. For the portion of the portfolio on which call options are written, its upside is theoretically capped at the strike level of the written call options. An important consideration, however, is that by leaving a portion of the fund’s notional holdings uncovered, investors may still be able to participate in some of the upside of these bitcoin-tracking products. On the other side of the coin, BCCC will remain fully exposed to the downside price movements of the underlying ETPs. This downside is expected to be partially offset by the premiums that are pursued from writing the options. Operating in this fashion, the fund might make a bitcoin investment more palatable for those that still believe it can produce outsized returns but are apprehensive owing to its historically elevated levels of volatility.
Conveniently, the same measure of volatility that might promote disinterest in a bitcoin investment is something that may well allow BCCC to procure better option premiums and provide more generous distributions. Bitcoin has shown the propensity to operate under these wider levels of volatility, as illustrated by the standard deviation of its daily returns over time relative to some major domestic equity indices.
Conclusion: BCCC May Strike a Balance Between Growth and Distributions
Based on the intermittent periods of remarkable price appreciation that bitcoin has been able to realize over the years, it’s no mystery why it has garnered interest from a broad segment of the investment community. Nonetheless, the peaks and valleys that have been associated with these advances may make an unhedged position in bitcoin feel like a roller coaster ride. By writing call options on a portion of bitcoin holdings, investors have the opportunity to maintain a degree of upside price appreciation potential associated with bitcoin, while managing its volatility through the pursuit of option premiums and distributions. The Global X Bitcoin Covered Call ETF (BCCC) provides that potential exposure and may help accomplish that goal.
BCCC – Global X Bitcoin Covered Call ETF
Click the fund name above to view current performance and holdings. Holdings are subject to change. Current and future holdings are subject to risk.