BLOX Crypto ETF Gains Momentum as It Blends Digital Asset Exposure and Options-Based Earnings

A recently launched crypto ETF in the United States is gaining traction, reflecting increasing investor demand for diversified exposure to digital assets beyond single-coin products.

Debuting on June 17, the Nicholas Crypto Income ETF (trading under the ticker BLOX) combines digital asset investments with options income strategies. Since its inception, the fund has attracted roughly $4.52 million in net inflows, boosting its assets under management to nearly $4.9 million, based on figures from VettaFi and the ETF’s own reports.

“The options income space is practically evolving into its own asset class,” said David Nicholas, CEO of XFUNDs, during an interview with CoinDesk. He highlighted that the fund is appealing to yield-focused retail investors eager for crypto exposure paired with income opportunities.

A Three-Part Investment Model

Developed in partnership with Tidal Investments LLC, BLOX operates with a diversified, three-pronged approach:

• Equity Component: BLOX invests in publicly traded firms involved in crypto-related businesses, including blockchain companies or corporations holding digital assets on their balance sheets.
• Crypto ETF Component: The ETF allocates capital to bitcoin and ether ETFs while maintaining flexibility to diversify into additional digital assets as new regulated products become available. As of Thursday, BLOX’s portfolio included significant holdings in BlackRock’s spot Ethereum ETF, Coinbase, Nvidia, Marathon Digital (MARA), and Core Scientific. This balanced exposure ensures that BLOX’s performance isn’t solely tied to bitcoin price movements.
• Options Component: To enhance income, the fund deploys options strategies by selling call and put spreads related to its crypto ETF holdings and writing covered calls or put spreads on its equity investments.

“We hold around 11 different businesses that we expect will benefit from bitcoin or ether price appreciation, but they’re not crypto tokens themselves,” Nicholas explained. “This approach gives investors both direct digital asset exposure and investment in public companies with tangible revenues and growth potential. That’s what makes this fund unique.”

Generating Extra Yield Through Options

Options writing forms a crucial part of BLOX’s income strategy. By selling options contracts, the fund collects premiums, similar to earning a fee for providing insurance against market volatility.

Specifically, writing put spreads enables BLOX to earn premiums if the underlying assets gain value, thus boosting returns. The ETF also trades options tied to spot crypto ETFs, including BlackRock’s spot bitcoin ETF (IBIT).

For instance, Coinbase—one of BLOX’s major holdings—jumped over 14% during the final week of June. Thanks to its multi-faceted investment strategy, BLOX profited both from the stock’s price surge and from options-generated income. Core Scientific, another holding, saw a similar rally of roughly 15% recently.

“That’s the beauty of put spreads—there’s no upside limit. A put spread is essentially a bullish position,” Nicholas said. BLOX distributes income derived from options premiums and dividends from its equity positions to investors on a weekly basis.

Although crypto traders have long employed options strategies such as put spreads and high-strike calls on offshore exchanges like Deribit, these income-generating tactics are now gaining popularity among ETF issuers and broader equity investors.

Future Altcoin Exposure

Looking ahead, BLOX could expand into additional cryptocurrencies should regulatory conditions allow.

“If the SEC greenlights other products—like a potential Solana ETF—we’d be able to file an amendment to include them in our fund,” Nicholas noted. “There’s no need for a separate ETF because BLOX is structured to provide broad crypto exposure, so we’d simply integrate new assets into the existing fund.”

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