As crypto makes its way into the mainstream, investors are looking for ways to get exposure to both the most popular coins, as well as the companies that build and maintain the technology’s infrastructure. The Nicholas Crypto Income ETF (BLOX), which hit the market Tuesday, offers both in addition to an income stream.
BLOX, launched by Nicholas Wealth in partnership with Tidal Investments, is an actively managed exchange-traded fund that combines an equity portfolio, a crypto portfolio, and an options overlay, according to a press release. The expense ratio is 1.03%.
“When you think of crypto, there’s a lot of money that’s gone into singular names like MicroStrategy or Coinbase, and these stocks have had a great run,” David Nicholas, CEO of XFunds, told etf.com. But investors are now looking to get exposure in a more diversified way, he added.
BLOX’s equity component includes investment in publicly traded companies that help make up various aspects of the crypto ecosystem, including crypto mining, trading platforms, blockchain technology providers, financial services firms and companies holding significant crypto assets on their balance sheets. Coinbase Global Inc. (COIN), Robinhood Markets Inc. (HOOD), Strategy (MSTR) and Block Inc. (XYZ) are among its top 10 holdings.
The crypto sleeve of the fund provides direct exposure to Bitcoin and Ether through U.S.-listed ETFs and exchange-traded products, including the iShares Ethereum Trust ETF (ETHA).
As for income, the fund sells put spreads on the crypto sleeve and selectively writes covered calls or put spreads on the equity holdings. Nicholas said that while there are covered call ETFs available that have high assets under management, with covered calls you are “essentially capping your upside.” That’s not the case with BLOX.
“If you’re looking to buy Bitcoin, you believe that the future is bullish for Bitcoin, meaning you want to capture as much upside as you can,” Nicholas added. The fund offers weekly dividends and distributions, as opposed to monthly ones.
XFunds by Nicholas Wealth has a history of providing income for investors through an options strategy.
The firm also offers the Nicholas Fixed Income Alternative ETF (FIAX), which launched in 2022 and seeks to provide investors with income via U.S. Treasury fixed-income securities and a defined risk option premium. In 2024, the firm introduced the Nicholas Global Equity and Income ETF (GIAX), which offers exposure to global equities and generates income by selling index call spreads.
