Brief Summary
This video explores Bitcoin ETFs that pay monthly income, comparing their distributions, total returns, and how they generate income. It covers six Bitcoin ETFs: BITO, MAXI, BTCI, YBIT, YBTC and MSTY. The video also contrasts Bitcoin Income ETFs with Bitcoin Spot ETFs, highlighting the advantages and disadvantages of each, and concludes with the author's personal take on Bitcoin Income ETFs and their role in generating income for retirement.
- Compares six Bitcoin ETFs that pay monthly income.
- Analyzes distributions, total returns, and income generation methods.
- Contrasts Bitcoin Income ETFs with Bitcoin Spot ETFs.
Introduction
The author introduces the topic of Bitcoin ETFs that provide monthly income, sparked by the high yield and appreciation of the Maxi Bitcoin ETF. The video aims to explore and compare various Bitcoin ETFs that offer monthly income, catering to those interested in Bitcoin exposure with regular payouts.
Hi from Bangkok
The author is filming from Bangkok and introduces the topic of Bitcoin ETFs that pay monthly income. In addition to the Maxi ETF, five other Bitcoin ETFs were found, making a total of six. The video will cover the income generated by these ETFs, compare their total returns, and examine how they generate income.
Distributions for the following Bitcoin ETF's: BITO, MAXI, BTCI, YBIT, YBTC, MSTY
The author discusses the income distributions of several Bitcoin ETFs, including BITO, MAXI, BTCI, YBIT, and MSTY. Instead of annual yield, the author presents the annualized yield for the lowest and highest distribution months due to the funds' short history and recent bullish market conditions. BITO's distributions varied significantly, with the highest annualized yield reaching 86% in June 2024. MAXI had a consistent distribution policy in 2023, with excess distributions in December, and shifted to spreading them out in 2024. BTCI, a newer fund, aims for annualized distributions of 25-30%. YBIT's distributions are volatile but equate to a high annual yield, while MSTY shows a crazy high annualized distribution.
Total Returns
The author analyzes the total returns of the Bitcoin ETFs, combining distributions and price changes. Due to the newness of most funds, there isn't a clear winner, but insights can be gained from short-term performance. BITO had the highest total return over the past month at 36%, while YBIT had the lowest at 20%. Over the past 6 months, MST was the breakout winner at 89%. Zooming out to the past 12 months, MST remained a clear winner with a 271% total return, despite being less than a year old. Comparing the two funds older than a year, BITO and MAXI, their total returns since Maxi's inception in September 2022 are nearly identical at just over 330%.
How do they make Money?
The author explains how each Bitcoin ETF generates income. BITO replicates Bitcoin's price action using futures contracts, guaranteed by US Treasuries as collateral. MAXI uses three strategies: holding fixed-income assets, employing option spreads on individual stocks or indexes, and entering into Bitcoin futures contracts. BTCI uses options to replicate Bitcoin's price by trading options on the BITO ETF, employing a synthetic covered call strategy. YBIT and MSTY also use options to create a synthetic covered call strategy, with YBIT already using ibit for its options.
Bitcoin Income ETF's versus Bitcoin Spot ETF's
The author compares Bitcoin Income ETFs with Bitcoin Spot ETFs. Bitcoin Income ETFs use options and futures to generate income, while Spot Bitcoin ETFs simply hold actual Bitcoin. Spot ETFs offer advantages such as being more tax-efficient, having lower fees, and avoiding performance drag from options and futures trading. The author notes that BITO has underperformed Bitcoin over time and highlights Bitcoin's high volatility compared to the S&P 500.
My Take on Bitcoin Income ETF's
The author shares their personal take on Bitcoin Income ETFs, advising viewers to understand Bitcoin before investing. The author currently has a 1% allocation to Bitcoin through MAXI and is open to increasing it to 5% in the future. While acknowledging that holding Bitcoin in a wallet or spot ETF will outperform income funds long-term, the author prioritizes generating consistent income for retirement. They find MicroStrategy a bit wild but might consider MST after a correction.
