Exploring the Differences Between Bitcoin Covered Call Options: YBTC vs. YBIT
Starting Point for Roundhill Bitcoin Covered Call Strategy ETF (YBTC): Explore YieldMax Bitcoin Option Income Strategy ETF (YBIT) First
Getting a good grasp of the YieldMax Bitcoin Option Income Strategy ETF (YBIT) can serve as a solid foundation before diving into the Roundhill Bitcoin Covered Call Strategy ETF (YBTC). These two ETFs share some striking similarities as they both focus on option-based income strategies related to Bitcoin.
Mapping Out Their Relationship and Similarities
When it comes to their relationship, these ETFs show a strong positive correlation, with YBIT and YBTC's price movements moving in tandem 80% of the time. This points to a similar response to market conditions.
In terms of investment focus, both ETFs apply strategies centered around Bitcoin, albeit with subtle differences. While YBIT deploys a synthetic covered call strategy based on futures contracts, YBTC favors a covered call strategy that involves selling options to generate income and limit potential upside.
Breaking Down Similarities
Both ETFs exhibit comparable volatility with YBTC registering 12.87% and YBIT at 12.48%. Investors seeking diversification may find both funds as suitable options, although they differ in specific strategies and risk profiles.
Key Differences to Recognize
Despite their similarities, some crucial differences set YBIT and YBTC apart:
- Dividend Yield: YBIT boasts a significantly higher dividend yield of around 90.49%, compared to YBTC's 47.69%.
- Maximum Drawdown: YBIT has faced a larger maximum drawdown of -29.01%, contrasting YBTC's -23.39%.
- Expense Ratio: YBIT has a higher expense ratio of 4.76%, while YBTC's expense ratio is 0.95%.
Ultimately, both ETFs offer distinct approaches to generating income from Bitcoin, where YBIT zeroes in on generous dividend payouts, and YBTC potentially offers favorable growth prospects for investors eager for increased Bitcoin exposure.
Investors considering the Roundhill Bitcoin Covered Call Strategy ETF (YBTC) might find it beneficial to first familiarize themselves with YieldMax Bitcoin Option Income Strategy ETF (YBIT), as both ETFs use technologies in their underlying strategies for financing and investing in Bitcoin. The difference lies in their approaches - YBIT offers higher dividend yields, a larger maximum drawdown, and a higher expense ratio compared to YBTC, which focuses on generating income and limiting potential upside through covered call options.
