On October 2, 2025, the Federal Register published a Securities and Exchange Commission notice concerning Nasdaq’s proposal to list and trade shares of the iShares Bitcoin Premium Income ETF. The proposed trust would combine direct bitcoin exposure with an actively managed call-option strategy intended to produce premium income.
The publication did not approve the product or authorize its launch. Nasdaq had filed the proposed rule change with the SEC on September 30 under Rule 5711(d), which governs Commodity-Based Trust Shares. October 2 was the date the notice entered the Federal Register and the proposal became part of the formal public rulemaking record.
That distinction matters. On October 2, investors could verify a proposed product structure and regulatory process—not an operating fund, established distribution rate or SEC endorsement.
Bitcoin exposure with an options layer
According to the notice, the trust’s assets would consist primarily of bitcoin, together with shares of the iShares Bitcoin Trust ETF, known as IBIT, cash and premiums associated with written options. Its stated objective was generally to reflect bitcoin’s price performance while generating income by selling call options primarily on IBIT or indexes tracking U.S. spot-bitcoin exchange-traded products.
The options could include conventional exchange-listed contracts, flexible exchange options and customized over-the-counter contracts. The trust’s IBIT and cash positions could be used to settle exercised options, while index and over-the-counter contracts would generally be cash-settled under the proposed design.
Selling calls changes the return profile. Premiums can provide income, but an exercised call may surrender part of the appreciation that otherwise would have accompanied a sharp bitcoin rally. The proposed income was therefore compensation arising from derivatives contracts, not native yield generated by the Bitcoin protocol.
The filing also said the trust would not be registered as an investment company under the Investment Company Act of 1940. To remain outside that framework, it would not own or acquire securities exceeding 40% of total assets, excluding government securities and cash items, on an unconsolidated basis. Bitcoin itself was treated as the commodity-based holding for the proposal, while IBIT shares and options were securities.
Why the proposal mattered
The filing illustrated the next stage in the institutional packaging of bitcoin. U.S. spot-bitcoin exchange-traded products already supplied price exposure, and listed options on those products supplied a regulated derivatives layer. The proposed trust sought to combine those components inside one actively managed security.
That could appeal to investors seeking cash distributions or reduced sensitivity to some price movements, but the filing did not establish either outcome. Option premiums vary with volatility, strike selection, expiration dates and portfolio positioning. A covered-call structure can still lose value when bitcoin falls, and its performance can lag direct exposure when bitcoin rises rapidly.
The proposal also introduced additional counterparties and valuation decisions. Exchange-listed options have observable markets, while customized over-the-counter contracts may be less transparent and expose the trust to bilateral credit risk. Nasdaq argued that these instruments would help the trust meet its objective, but that was the exchange’s regulatory submission rather than an independently demonstrated performance result.
Valuation and trading limits
The proposal identified the CME CF Bitcoin Reference Rate—New York Variant for valuing bitcoin, subject to specified fallback procedures if the benchmark became unavailable or was judged unreliable. It also contemplated an intraday indicative value disseminated every 15 seconds during Nasdaq’s regular session.
That indicative value would not be a continuously calculated net asset value. Bitcoin trades around the clock, while fund shares and listed options observe exchange hours. Differences among the benchmark, underlying markets, option valuations and the exchange-traded share price could therefore produce premiums, discounts or tracking differences.
The notice further described creation and redemption baskets of 40,000 shares available through authorized participants. Those mechanics supported wholesale fund liquidity; they did not give ordinary shareholders a direct right to exchange individual shares for bitcoin.
As of October 2, the defensible conclusion was narrow: Nasdaq had placed a new bitcoin-and-options wrapper into the SEC’s public review process. Approval, launch terms, fees, distributions and realized performance remained unresolved.
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