10x Research: BlackRock's BITA to underperform BTC regardless of price direction

BlackRock's recently launched Bitcoin Premium Income ETF (BITA) is structured to underperform Bitcoin itself or deliver poor absolute returns in nearly all market scenarios, regardless of BTC's price direction, according to an analysis by 10x Research. BITA holds the spot Bitcoin ETF (IBIT) and sells monthly call options against a portion of its assets, distributing the premium received to investors. This covered call strategy inherently sacrifices upside potential for income. 10x Research noted that while there are market phases where selling calls is profitable, there are also phases where it is not. The firm argued that selling calls during unfavorable periods does not generate meaningful income but instead cheaply gives away upside potential. According to the analysis, BITA is designed to sell these calls mechanically every month, irrespective of market conditions.