The Simplify Bitcoin Strategy PLUS Income ETF (MAXI) is a groundbreaking exchange-traded fund designed to offer investors dynamic exposure to Bitcoin’s price movements while generating consistent income through a risk-managed options overlay. Unlike traditional Bitcoin ETFs that provide static exposure, MAXI leverages an active, rules-based strategy to adjust its Bitcoin risk exposure between 50% and 200% based on market conditions—making it a compelling option for those seeking both growth and yield in their digital asset allocation.
How MAXI Works: Dynamic Bitcoin Exposure & Income Generation
MAXI does not invest directly in physical Bitcoin. Instead, it gains exposure through financial instruments tied to Bitcoin’s performance, including Bitcoin futures, swaps, options, and exchange-traded products (ETPs) such as spot Bitcoin ETFs like IBIT. This structure allows the fund to remain compliant within the U.S. regulatory framework while offering efficient access to the cryptocurrency market.
Managed Bitcoin Exposure via Trend-Following Model
At the core of MAXI’s strategy is a proprietary technical model that evaluates market signals to determine whether conditions are “risk-on” or “risk-off.” Based on this assessment:
- In risk-on environments, MAXI can increase its exposure up to 200% of net assets.
- During risk-off periods, exposure may be reduced to as low as 50%, helping mitigate volatility and drawdowns.
This trend-following approach aims to outperform a static, buy-and-hold Bitcoin position over time by strategically underweighting during downturns and overweighting during bullish momentum.
Income Generation with Options Overlay
To enhance returns, MAXI employs a risk-managed options overlay that generates monthly income by selling put spreads across various asset classes:
- Equity indices
- Fixed income ETFs
- Commodity and currency ETPs
- Bitcoin futures
Selling put spreads involves collecting premiums by writing (selling) put options at one strike price while simultaneously buying puts at a lower strike—limiting downside risk. This strategy provides a steady income stream without requiring additional capital outlay, improving capital efficiency.
Portfolio Application: Why Invest in MAXI?
MAXI serves multiple roles in a diversified portfolio:
- First-of-its-kind hybrid: Combines Bitcoin exposure + income generation in a single ETF.
- Capital efficient: Offers leveraged upside during strong markets while reducing risk when conditions deteriorate.
- Tax simplicity: No Schedule K-1 forms—ideal for individual investors seeking ease of tax reporting.
- Actively managed with discipline: Rules-based decision-making removes emotion from trading.
As of December 31, 2024, MAXI had approximately $54.9 million in net assets, with a gross expense ratio of 6.10% and a SEC 30-Day Yield of 1.88%.
Performance Snapshot (as of 12/31/24)
MAXI has demonstrated strong performance since its inception on September 29, 2022, particularly in volatile markets where its dynamic exposure model shines.
| Metric | 3-Month | 6-Month | YTD | Since Inception |
|---|---|---|---|---|
| NAV Return | 39.99% | 38.60% | 90.53% | 303.39% |
| Market Price Return | 43.12% | 42.19% | 93.28% | 311.82% |
| Nasdaq Bitcoin Reference Price Index | 46.87% | 55.23% | 122.63% | 379.64% |
While MAXI has not outperformed the pure Bitcoin index over all periods, its objective isn't to track Bitcoin perfectly—but to deliver better risk-adjusted returns over full market cycles.
Annualized Total Returns:
- 1-Year NAV Return: 90.53%
- Since Inception (Annualized): 85.63%
Top Holdings (as of 12/31/24)
MAXI’s portfolio reflects its multi-layered strategy:
- BTCF5 (Bitcoin Futures): 101.96% notional exposure
- Short-dated U.S. Treasury Bills (Jan–Apr 2025): Combined ~170% allocation
- IBIT Call Option (C65): 75.58% delta exposure
- MSTR Put Option (P205): 31.89% delta exposure
- Cash: -58.02%, indicating leveraged positions
Excess cash is invested in short-term Treasuries, adding stability and yield.
Key Risks to Understand
While MAXI offers innovative benefits, investors should be aware of the following risks:
- Bitcoin Risk: Exposure via futures means returns depend on derivatives pricing, which can deviate from spot prices.
- Futures Contract Risk: Includes leverage, liquidity constraints, and counterparty default risk.
- Cryptocurrency Volatility: High price swings can impact fund performance significantly.
- Options Strategy Risk: Selling puts generates income but exposes the fund to losses if markets decline sharply.
- Subsidiary Structure Risk: MAXI uses a Cayman Islands subsidiary (not registered under the 1940 Act), which carries additional regulatory and tax complexities.
- Tax Treatment Risk: If the fund fails to qualify as a Regulated Investment Company (RIC), it could face corporate-level taxation.
Frequently Asked Questions (FAQ)
Q: Does MAXI hold actual Bitcoin?
A: No. MAXI does not invest in physical Bitcoin. It gains exposure through futures contracts, swaps, options, and other regulated financial instruments linked to Bitcoin’s price.
Q: How does MAXI generate income?
A: By selling put spreads on various ETFs and ETPs—including equities, bonds, commodities, currencies, and Bitcoin futures—the fund collects premium income monthly.
Q: What is the difference between NAV and market price?
A: NAV (Net Asset Value) reflects the underlying value of the fund’s holdings per share, calculated daily. Market price is what investors pay or receive when buying or selling shares on an exchange, influenced by supply and demand.
Q: Is MAXI suitable for conservative investors?
A: Due to its use of leverage, derivatives, and exposure to volatile assets like Bitcoin, MAXI is best suited for investors with higher risk tolerance and a long-term horizon.
Q: Why does MAXI have a high expense ratio?
A: The 6.10% gross expense ratio reflects active management, derivatives trading costs, and operational complexity from using a subsidiary structure.
Q: Can MAXI lose more than my initial investment?
A: While the fund itself limits losses through defined-risk strategies like spreads, leveraged exposure means significant drawdowns are possible during adverse market moves.
Final Thoughts: A Strategic Addition to Crypto Portfolios
MAXI represents a new evolution in digital asset investing—merging adaptive risk management, income generation, and regulatory compliance into one accessible ETF wrapper. For investors looking beyond passive Bitcoin exposure, MAXI offers a sophisticated tool to navigate crypto’s inherent volatility while capturing upside potential.
Whether used as a core holding or tactical allocation, MAXI enables investors to participate in Bitcoin’s growth story with enhanced flexibility and yield—without the complexities of direct crypto ownership.