The world of crypto-linked investment vehicles is expanding rapidly, and Bitwise Asset Management is at the forefront with its latest innovation: a suite of actively managed option income ETFs. The newly launched funds—IMST, ICOI, and IMRA—are designed to harness the high volatility of leading crypto-exposed equities like MicroStrategy (MSTR), Coinbase (COIN), and Marathon Digital Holdings (MARA) through a dynamic covered call strategy. Backed by daily active management, these ETFs aim to deliver consistent monthly income while maintaining meaningful exposure to underlying stock appreciation.
A New Approach to Crypto-Equity Income Generation
Unlike traditional passive ETFs, the Bitwise Option Income ETF suite leverages a synthetic covered call strategy rooted in active decision-making. Rather than directly holding shares of MSTR, COIN, or MARA, the funds gain exposure through options contracts, allowing for greater flexibility and responsiveness to market dynamics.
Each fund sells out-of-the-money call options on its respective underlying stock. This generates premium income—distributed monthly to investors—while retaining upside potential up to the strike price of the sold options. The trade-off? Limited participation in gains beyond that threshold. However, by actively adjusting positions based on real-time data, Bitwise aims to optimize this balance.
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Expert Management Meets Market Volatility
Helmed by Jeff Park, Bitwise’s Head of Alpha Strategies, the portfolio management team brings deep expertise in institutional derivatives and crypto markets. With prior experience at Morgan Stanley, Harvard Management Company, and Corbin Capital, Park emphasizes that success in this space hinges on constant vigilance.
“The high volatility of stocks like MSTR, COIN, and MARA creates compelling opportunities to generate income,” said Park. “But it’s essential to be constantly monitoring news, capital flows, regulatory developments, options pricing, market sentiment, and other dynamics.”
This hands-on approach sets the funds apart from static, rules-based competitors. By analyzing momentum, derivative-market imbalances, and macroeconomic signals on a daily basis, the team seeks to time option sales for maximum efficiency—capturing premiums during periods of elevated volatility while minimizing downside risk.
Why Crypto-Exposed Stocks?
The selection of MSTR, COIN, and MARA is no accident. These companies are deeply intertwined with the performance and perception of Bitcoin:
- MicroStrategy (MSTR) holds over 200,000 BTC as of recent filings.
- Coinbase (COIN) is the largest regulated U.S. crypto exchange.
- Marathon Digital Holdings (MARA) is a major Bitcoin mining firm.
Because their valuations are closely tied to Bitcoin’s price movements—and often exhibit amplified swings—their volatility presents a unique opportunity for income generation via options.
As Bitwise CEO Hunter Horsley noted:
“Crypto is well known historically both for its performance and its high volatility. That volatility presents a unique opportunity to generate income.”
How the Covered Call Strategy Works
A covered call involves owning an asset (or synthetic exposure to it) and selling call options against it. Here's how it applies:
- The fund establishes long exposure to MSTR, COIN, or MARA via options.
- It then sells call options with strike prices above the current market value (out-of-the-money).
- Investors receive the premium from these sales as income.
- If the stock remains below the strike price by expiration, the option expires worthless—the fund keeps the premium and can repeat the process.
- If the stock rises above the strike price, the fund may have to cap its gains but still retains the premium.
This strategy is particularly effective in sideways or moderately bullish markets—common conditions in volatile sectors like crypto equities.
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Fees and Distributions
Investors benefit from transparent cost structures:
- Net expense ratio: 0.98% for all three funds
- Gross expense ratio: 0.99% for ICOI and IMST (fee waiver in place until March 25, 2027)
Monthly distributions provide predictable cash flow—a key advantage for income-focused investors navigating uncertain markets.
Core Risks: What Investors Should Know
While the potential rewards are attractive, several risks must be considered:
Market Risk
Equity prices can decline due to economic shifts, regulatory changes, or negative sentiment—directly impacting fund value.
Covered Call Strategy Risk
While premiums provide income, they cap upside potential. If MSTR or COIN surges past the strike price, gains are limited.
Synthetic Exposure Risk
Since the funds use derivatives rather than direct stock ownership, their performance may not perfectly track the underlying securities.
Digital Assets Risk
The value of MSTR, COIN, and MARA is heavily influenced by Bitcoin’s price and associated risks: fraud, hacking, regulatory crackdowns, or exchange failures.
Concentration and Non-Diversification Risk
Each fund focuses on a single stock exposure. A negative event affecting one company could disproportionately impact the fund.
Derivatives and Options Risk
Options pricing is complex and sensitive to volatility expectations (implied volatility), interest rates, and time decay. Misjudging these factors can reduce effectiveness.
New Fund Risk
As recently launched products, IMST, ICOI, and IMRA have no performance history. Past results aren’t indicative of future returns.
Frequently Asked Questions
Q: Do these ETFs own actual shares of MSTR, COIN, or MARA?
A: No. The funds use synthetic exposure through derivatives and do not hold physical shares. Investors are not entitled to dividends paid by the underlying companies.
Q: How often are distributions made?
A: Monthly. Income is generated primarily from premiums collected on sold call options.
Q: Can I benefit from large price surges in MSTR or COIN?
A: Only up to the strike price of the sold options. Gains beyond that level are capped as part of the covered call structure.
Q: Why use a synthetic approach instead of buying shares directly?
A: It allows for more flexible risk management, tax efficiency, and operational scalability—especially important when dealing with volatile assets.
Q: Are these funds suitable for conservative investors?
A: They are best suited for investors who understand options strategies and are comfortable with equity volatility and limited upside participation.
Q: Where can I find the full prospectus?
A: Visit official fund websites such as icoietf.com/materials (for ICOI), imraetf.com/materials (for IMRA), or imstetf.com/materials (for IMST).
A Strategic Addition to the Crypto Investment Landscape
Bitwise’s new ETF suite represents a sophisticated evolution in income-oriented investing for crypto-aware portfolios. By combining active management with time-tested options strategies, IMST, ICOI, and IMRA offer a disciplined way to monetize volatility—without sacrificing all upside potential.
For investors seeking monthly income with exposure to major crypto equities, these funds present a compelling alternative to passive holdings or speculative trading.
👉 Learn how strategic options use can transform your investment returns
Backed by a seasoned team and a clear focus on market dynamics, Bitwise continues to expand access to innovative financial products in the digital asset ecosystem—all while maintaining transparency and investor education at its core.