Bitcoin’s volatility has long been a double-edged sword—posing risks for some investors while presenting unique opportunities for others. Now, Amplify ETFs is turning that volatility into a structured income strategy with the launch of two innovative, actively managed exchange-traded funds: the Amplify Bitcoin 24% Premium Income ETF (BITY) and the Amplify Bitcoin Max Income Covered Call ETF (BAGY).
These next-generation ETFs are designed to generate consistent monthly income by leveraging weekly options-writing strategies on Bitcoin exchange-traded products (ETPs), offering investors exposure to both income and upside potential in the fast-evolving digital asset space.
Introducing BITY: Balanced Growth and Targeted Income
The Amplify Bitcoin 24% Premium Income ETF (BITY) is engineered for investors seeking a strategic balance between capital appreciation and reliable income. With a target of generating 24% annual option premium income, BITY writes 5–10% out-of-the-money weekly call options on a portion of its Bitcoin ETP holdings.
By using weekly options instead of monthly ones, BITY gains four times more frequent opportunities to reset strike prices and capture premiums. This dynamic approach enhances compounding potential and allows the fund to adapt quickly to shifting market conditions.
👉 Discover how weekly options strategies can unlock high-yield income from volatile assets.
Unlike passive Bitcoin investments, BITY employs an active risk-managed framework that aims to maintain significant upside participation while delivering predictable monthly distributions. It’s ideal for income-focused investors who still want meaningful exposure to Bitcoin’s long-term growth trajectory.
Introducing BAGY: Maximizing Weekly Income with Upside Participation
For investors prioritizing maximum income, the Amplify Bitcoin Max Income Covered Call ETF (BAGY) takes a more aggressive approach. BAGY targets an annualized option premium yield between 30% and 60%, writing 5% out-of-the-money covered calls on Bitcoin ETPs with one-week or shorter expirations.
This high-frequency strategy collects option premiums four times more often than traditional monthly covered call funds, creating strong potential for compounded returns. While participation in Bitcoin price gains is capped weekly at approximately 5%, this controlled upside is paired with consistent income generation—even during sideways or moderately bullish markets.
BAGY transforms Bitcoin’s inherent volatility into a repeatable income engine, making it a compelling addition to alternative or income-focused portfolio allocations.
How These ETFs Work: Turning Volatility into Opportunity
Both BITY and BAGY follow a three-step process to generate returns:
- Establish Long Bitcoin Exposure: The funds gain indirect exposure to Bitcoin through regulated Bitcoin ETPs and may use synthetic instruments.
- Write Weekly Covered Calls: They sell short-term call options against their holdings, collecting premiums in the process.
- Roll and Reinvest: As options expire, new contracts are written, maintaining continuous income flow and adapting to current price levels.
This structure enables enhanced total return potential through recurring premium collection, while still allowing for partial participation in Bitcoin’s upward movements.
“Bitcoin’s volatility is both a challenge and an opportunity,” said Christian Magoon, CEO of Amplify ETFs. “BAGY and BITY represent the next generation of weekly Bitcoin option income strategies—delivering attractive yields while preserving meaningful upside exposure.”
Core Investment Benefits
Monthly Income Distribution
Both ETFs aim to distribute income monthly, providing predictable cash flow that can be reinvested or used as supplemental income.
Active Risk Management
As actively managed funds, BITY and BAGY benefit from professional oversight by Amplify Investments LLC, with sub-advisory support from Kelly Strategic Management, LLC and Penserra Capital Management LLC. This team continuously evaluates market conditions, option pricing, and portfolio positioning.
Accessible Digital Asset Exposure
Rather than investing directly in Bitcoin, these ETFs utilize regulated Bitcoin ETPs—offering institutional-grade access without the complexities of crypto custody or exchange trading.
Portfolio Diversification
With features of growth, income, and alternative strategies, BITY and BAGY can fit within multiple portfolio sleeves, enhancing diversification while targeting above-market yields.
👉 Learn how structured income strategies are reshaping digital asset investing.
Key Risks and Considerations
While the income potential is compelling, investors should understand the risks involved:
- No Direct Bitcoin Ownership: The funds invest in Bitcoin ETPs, not Bitcoin itself, adding a layer of counterparty and product-specific risk.
- Regulatory Uncertainty: Digital assets remain subject to evolving regulations, which could impact ETP availability or trading.
- Covered Call Limitations: Gains are capped when Bitcoin rises above strike prices; investors may miss out on larger rallies.
- Volatility and Liquidity Risk: Option premiums fluctuate based on market sentiment, interest rates, and underlying asset movement. FLEX options used may be less liquid than standardized contracts.
- Return of Capital Distributions: Some distributions may represent a return of principal rather than pure income.
As with any investment, prospective investors should carefully review the prospectus at AmplifyETFs.com before committing capital.
Frequently Asked Questions (FAQ)
Q: Do BITY and BAGY invest directly in Bitcoin?
A: No. Both funds gain exposure through regulated Bitcoin exchange-traded products (ETPs), not direct ownership of cryptocurrency.
Q: What does "writing covered calls" mean in this context?
A: It means selling call options against assets the fund already owns. In return, the fund collects premiums—generating income—but agrees to sell the asset at a set price if the option is exercised.
Q: How often are options written?
A: Weekly. This allows for more frequent premium collection and adaptive strike pricing compared to monthly strategies.
Q: Can I lose money investing in these ETFs?
A: Yes. All investments carry risk, including potential loss of principal. While income is targeted, there’s no guarantee of returns, especially in declining or highly volatile markets.
Q: Are distributions guaranteed?
A: No. While the funds aim for monthly distributions, the amount and frequency depend on market conditions and option performance.
Q: Who manages these funds?
A: Amplify Investments LLC is the investment adviser, with Kelly Strategic Management and Penserra Capital Management serving as sub-advisers.
The Future of Bitcoin Income Strategies
With over $10 billion in assets under management as of March 31, 2025, Amplify ETFs continues to innovate at the intersection of traditional finance and digital assets. BITY and BAGY represent a new evolution in options-based strategies—offering retail and institutional investors alike a disciplined, transparent way to harness Bitcoin’s volatility for income generation.
As demand grows for yield-enhanced crypto solutions, these ETFs position themselves as core tools for modern portfolios seeking growth, income, and strategic diversification.
👉 Explore how next-gen financial products are redefining investment returns.
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