Nicholas Wealth has launched the Nicholas Crypto Income ETF (NYSE:BLOX), a fund that aims to deliver access to the broader cryptocurrency universe with the addition of an options-based approach intended to generate a stream of income. The ETF was launched on Wednesday and is the newest entrant in the firm’s growing roster under the XFUNDS brand.

As an actively managed product, BLOX stands out from traditional crypto-themed funds in that it combines three specific components. The first is an equity portfolio that targets companies involved in the digital asset value chain -- from cryptocurrency miners to trading platforms, blockchain infrastructure providers, and companies with large crypto holdings on their balance sheets.

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The second component provides direct exposure to digital currencies by way of U.S.-listed ETFs and exchange-traded products tracking Bitcoin and Ethereum. This strategy provides regulated market access and offers flexibility to include other crypto-linked instruments as new vehicles emerge.

What distinguishes BLOX, though, is its options overlay approach, which is designed to actively manage both risk and income opportunity. Instead of depending mainly on price appreciation, the fund aims to produce income by selling put spreads on its crypto component and selectively writing covered calls or other put spreads on its equity portfolio. In contrast to much conventional options-based income funds that limit upside through call spreads, BLOX’s structure permits more exposure to market appreciation.

David Nicholas, XFUNDS by Nicholas Wealth CEO, said the fund is created to tackle the double challenges investors encounter in digital asset markets -- high volatility and missing consistent income.

The fund seems ideally suited for financial planners and income-driven investors seeking to tap the crypto economy in a more conventional investment format. It will likely be of interest particularly to clients with lower risk tolerance or who are in need of retirement-friendly solutions in an asset class commonly considered volatile.

BLOX complements Nicholas Wealth’s expanding ETF line-up, which also comprises the Nicholas Fixed Income Alternative ETF (NYSE:FIAX), a 2022-introduced fund that leverages Treasury exposure and option premiums, and the Nicholas Global Equity and Income ETF (NYSE:GIAX), launched in 2024 to combine global equity exposure with index-based option strategies.

By combining digital asset exposure, diversification of equity, and a specified-income overlay, BLOX can be a new point of entry into the cryptocurrency market, especially for investors who have stayed on the sidelines because of the asset class’s intrinsic volatility and absence of yield.

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