Investors who thrive on bitcoin’s wild price swings may be in for disappointment. Major banks are preparing to introduce new products that could dampen volatility in a market that has already become significantly calmer in recent years.
Most recently, Goldman Sachs filed an application for a Bitcoin Premium Income exchange-traded fund (ETF). The proposed fund relies on selling (writing) options tied to bitcoin-linked exchange-traded products to generate income while providing investors with exposure to the cryptocurrency. BlackRock is looking to launch a similar product.
Selling options is essentially writing insurance against price swings. The writers collect a premium in exchange for providing downside or upside…
