00:00Okay, let's talk about how Wall Street is financializing Bitcoin and what common call ETFs mean for the Bitcoin price,
00:08for volatility and also for retail investors who don't generally understand kind of this concept of what BlackRock has just
00:18launched in their iShares Bitcoin premium income ETF, which is beta, which started trading on the 16th of June and
00:26really became the first yield generating Bitcoin.
00:30I mean, ETF from a major asset manager and this beta rides call options on 20 to 35% of
00:37iBit's holdings monthly, targeting 15 to 25% annual yield while retaining at least 70% of Bitcoin's price appreciation.
00:47And that 0.65 expense ratio kind of undercuts competitors while retaining at least 70% of Bitcoin's, like I
00:58said, appreciation.
00:59And we see competitors like YBTC 0.95 and BTCI at 0.99, which is really where BlackRock is looking
01:13to have its competitive advantage.
01:14So we had to do a forensic map of this financial instrument and kind of for what it does to
01:21hold is the Bitcoin market structure itself and the options ecosystem that prices it, right?
01:27So the central finding, I think, is that covered call ETFs, at the end of the day, a yield transfer
01:34mechanism, and they convert a potential capital appreciation into current income, which sounds attractive until you model the returns over
01:44a full Bitcoin cycle.
01:45And this is what we wanted really to kind of look at here, the common threads, like financial engineers extracting
01:53fee income from complexity that retail investors don't fully price at the market structure level.
02:01So the overall growing beta and covered call ETF assets under management creates systematic options, dealer hedging flows that suppress
02:11Bitcoin's realized volatility, right?
02:15Create a kind of gravity towards specific price levels at option expiry and kind of benefits those sophisticated traders who
02:25can structure the offsetting position.
02:27So this is what's been going on behind the scenes while everybody is screaming that Bitcoin is dead, the bear
02:36market is here to stay, and these players are really making power moves.
02:43Bitcoin was once one of the cleanest assets in crypto.
02:46You own the asset, you pretty much hold the scarcity, and you capture the upside.
02:51Now Wall Street is doing what Wall Street does, right?
02:54By turning a simple asset into a structured income product, BlackRock's iShares Bitcoin premium ETF, the beta, gives investors Bitcoin
03:03exposure while generating monthly income through covered calls, which, like I said, sounds kind of really attractive, but Bitcoin does
03:13not pay a dividend, right?
03:14So the yield comes from selling call options, which means investors are being paid today in exchange for giving up
03:21part of Bitcoin's future upside.
03:25And I think these are the things that need to be paid more attention to in the markets right now
03:33to see where the opportunities still lie.
03:35And like I said, for income-focused investors, that might be useful, right, if you need monthly cash flow and
03:43would otherwise, you know, sell Bitcoin anyway, beta kind of makes sense.
03:48For long-term bulls, right, it's a different story.
03:52If your thesis is that Bitcoin goes much higher over time, then selling away part of your upside may work
03:59kind of directly against the reason you bought Bitcoin in the first place.
04:05And the bigger point is that beta marks a new phase in Bitcoin's financialization.
04:13It's a new phase in Bitcoin, right, it's a new phase in Bitcoin's financialization.
04:41For you to receive it, what you need to do is just check out the full breakdown and do the
04:45calculations with the proprietary tools that we've built, which the link to the full guide is in the description.
04:53And let me know what your thoughts are.
04:55Is this the future of Bitcoin?
04:57Where we're going to see a lot of suppressed volatility.
05:00Let me know your thoughts, like share, subscribe, turn on the notifications, trade on the very best exchanges using the
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05:11That goes a long way into what you actually spend when you're investing and trading in the digital assets space.
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05:21Like, share and subscribe.
05:23I'll see you guys next time.
05:24Peace, y'all.
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