Roundhill Bitcoin ETF Takes a Page from JEPI Playbook

Roundhill Bitcoin ETF Takes a Page from JEPI Playbook

Rising demand for covered call funds finds its way to volatile bitcoin futures contracts.

Finance Reporter
Reviewed by: Staff
Edited by: Ron Day

Roundhill Investments, which manages $608 million in 12 ETFs, filed to launch a crypto fund that takes a page from the playbook of JPMorgan & Co.’s wildly popular JEPI. 

Roundhill last week filed an application to issue The Roundhill Bitcoin Covered Call Strategy ETF, which would offer investors exposure to the largest cryptocurrency by utilizing a covered call strategy, as investor demand for bitcoin funds rises. 

The ETF will utilize a “synthetic” covered call strategy. The fund will work by purchasing and selling a mix of call and put options contracts that “utilize the bitcoin futures ETF as the reference asset,” the prospectus says. Unlike typical covered call ETFs, the fund will not be selling call options on a security that it already owns. Instead, it would gain exposure to bitcoin futures through options contracts that use the bitcoin futures ETF as the reference asset.  

“The benefit of using bitcoin for a covered call strategy is that bitcoin is extremely volatile,” analyst Sumit Roy said. “That volatility makes options for bitcoin valuable, increasing the income potential for strategies that sell those options.” 

The price of notoriously volatile bitcoin has surged 27% this month on expectations that a spot bitcoin ETF may be launched in the U.S. this year. Cryptocurrency investors appear to be betting the so-called crypto winter has thawed and are looking for ways to boost their exposure to the asset.  

 JEPI-Like Call Options Gain Popularity  

“However, the volatility cuts both ways,” Roy said. “While the potential for high income is there, so too is the potential for big losses should bitcoin go down.” 

The fund will generate income by selling call options that reference the bitcoin futures ETF, but this technique will also limit the amount that the fund can see potential upside of bitcoin futures ETF’s share price.  

“I think where you'd get in trouble with a Bitcoin covered call ETF is that you're cashing in the tail risk to upside, but keeping the tail risk to the downside," said analyst at Morningstar Bryan Armour. 

The fund will pay income to investors monthly. The ETF can also hold some traditional call option positions, according to its filing.  

Roundhill’s move to launch the fund comes as multiple ETF issuers, including BlackRock Inc. and Fidelity Investments, are vying to launch an ETF that tracks spot bitcoin. While the SEC allows ETFs that track bitcoin futures, the largest being the Proshares Bitcoin Strategy ETF (BITO), the agency has historically rejected funds that track physical bitcoin based on concerns of market manipulation.  

After the smashing success of JPMorgan’s Equity Premium Income ETF (JEPI), which took in $12.7 billion this year, firms have also been looking to call options as a way to generate income for investors. Goldman Sachs, as well as BlackRock, have both launched options writing funds this fall.  

Contact Lucy Brewster at [email protected].  

Lucy Brewster is a finance reporter at covering asset managers, emerging technologies, and regulation. She hosts webinars and appears on Exchange Traded Fridays,’s flagship podcast. She previously was a finance fellow at Fortune Magazine where she covered markets, investment strategy, and venture capital. She has also been a freelancer writer at the publication Mergers & Acquisitions and a research fellow at the Historic Hudson Valley. 

She graduated from Vassar College in 2022 with a degree in History and was an editor of The Miscellany News, the college's award winning student run newspaper. 

Lucy lives in Brooklyn, NY, and in her free time she loves to run and find new recipes to cook.