Summary Roundhill Bitcoin Covered Call Strategy ETF draws attention for its weekly distribution structure, currently exceeding 40% annualized. It achieves this by employing a synthetic covered call strategy on Bitcoin ETFs with short-term expirations. This, today for example, creates an upside cap slightly below 1% and a premium that varies at each roll depending on market volatility. With BTC-USD at all-time highs, an increase in volatility or profit-taking could raise the premium without losing appreciation potential. The risk is clear: if the underlying falls, YBTC falls as well, and so does the share value on which the distribution is calculated. I love starting from the communication strategies of the issuers, and it's fascinating how Roundhill defines the Roundhill Bitcoin Covered Call Strategy ETF ( YBTC ) as the first Bitcoin covered call ETF in the U.S. at listing. Since then, YBTC has maintained an anchoring to BTC-USD, thanks to the combination of price variation and distributions, which now exceed 40% annualized. And it's just as fascinating to analyze it today, in its internal structure, as BTC-USD, the (indirect) underlying of its strategy, reaches new all-time highs. I say this because, simply put, YBTC on average seems to capture only about 1% of these "weekly cycle" upswings and 100% of the downswings. A characteristic that, since its inception, has given it this type of price action. YBTC - Profile (Seeking Alpha) On the other hand, the distribution percentage depends precisely on the volatility of the underlying, so what better time to discuss YBTC than right after new all-time highs. Especially if BTC-USD reacts to these highs, as it seems to have reacted today. But let's go step by step. What is YBTC When evaluating YBTC, it's important to remember that we are talking about an ETF that uses a synthetic covered call on Bitcoin ETP/ETF (let's round it up to just ETF) to generate current income and, secondly, provide exposure to Bitcoin's price return. It does so with an ER of 0.96% and a bid/ask spread that over the past 30 days has averaged 0.17%. This means a total average cost above 1%. YBTC - Expense grade (Seeking Alpha) We have to consider that the strategy is quite static/mechanical. Simply because it doesn't buy spot Bitcoin, but the fund works actively with options (standardized and FLEX) written on Bitcoin ETFs, using Treasuries as collateral. Then it uses a synthetic covered call strategy to generate income, which it distributes on a weekly basis. But let's look at it more closely. Holding Distribution It buys calls and sells puts on one or more BTC ETFs. In addition, it sells weekly OTM calls to generate income. And this is clearly shown in today's holdings distribution : U.S. Treasury Bill (10/16/2025): 92.5% IBIT Options (10/17/2025, strike 66.7): +7.43% (call) / -0.76% (put) IBIT Options (10/10/2025, strike 71.95): -1.31% (call) FGXXX Money Market Fund: 1.56% Cash & Other: 0.59% A composition that the reader can easily forget: the options will be rolled in a few days . What matters is the concept. And the fact that the presence of the Short IBIT Call (strike 71.95, expiration 10/10/2025), with a notional exposure of $338.6M, currently imposes a cap on the upside of 0.93% . Essentially, today, the strategy seems to limit participation in the upside of the underlying (currently IBIT) to less than 1% per week. Scenario Analysis In practical terms, this means that if IBIT rises, for example, by 15% in a week, YBTC will generate an appreciation of 0.93%; IBIT - example 1 (Seeking Alpha) While if IBIT loses, for example, 15% in a week, YBTC will lose exactly 15% in capital value. Naturally, the total performance wouldn't be +0.93% or -15% because the weekly distribution softens the drop. IBIT - example 2 (Seeking Alpha) What impact will there be on the options market? At the time of rolling, the option premium will increase (since it's directly proportional to volatility), generating higher income for those holding YBTC. YBTC - Dividend History (Seeking Alpha) Today, the distribution rate is 43.68% annualized, with 100% of the distributions resulting from the return of capital (ROC). Even though in theory it should distribute only the combination of yield + option premium. YBTC - IBIT - total return (Seeking Alpha) Peer Analysis There are also alternative solutions that offer higher beta compared to the underlying, and for completeness, I'll mention BTCI. YBTC - BTCI: profile (Seeking Alpha) In this sense, the advantage of a partial overwrite aims to preserve part of Bitcoin's positive beta. A fund closer to YBTC could be YBIT. YBTC - YBIT: profile (Seeking Alpha) The difference in total returns is small, while it becomes more pronounced in price returns. In my opinion, there isn't exactly a better or worse choice: it depends on the investment style. Personally, I prefer to leave more room for the NAV. I talk about the reason in detail here. YBTC - YBIT - BTCI: total return (Seeking Alpha) Today's Situation: BTC ATH After reaching $125K, surpassing its all-time highs as well as a key "round number" for BTC-USD, it recorded a selling candle (profit-taking) that suggests a bull trap. BTC-USD: Price (Seeking Alpha) Bitcoin's volatility index has slightly increased, although it's still near its lows. Saying whether Bitcoin's bullish cycle has started or ended is complex, but assuming that volatility might rise around these levels is easier to imagine. If that's the case, this could support higher option premiums for ETFs with an almost total overlay like YBTC; in other words, higher distributions. Risk Consider that the distribution percentage refers to the NAV share value (we'll look at this aspect in the risk section). That's something often forgotten. If Bitcoin were to enter a bearish phase, it's true that volatility would increase, and therefore potentially (if one trusts the efficiency of the derivatives market) distributions as well. But if the share value declines, the total return would still have to account for capital losses. Not to mention that weekly rolls in periods of high volatility (e.g., April-July 2024) have shown premium/discount spikes greater than 10% compared to NAV. Even though this last case can be considered isolated compared to the rest of the time. Conclusion I won't go into personal portfolio strategies even if it's not in my "style" to work with buy-write ETFs with an almost total overlay like YBTC. That said, we have to consider that YBTC does exactly what it was built to do: it maximizes distribution through a buy-write strategy on a BTC ETF. It's a personal opinion, but I think the core lies precisely in holding it when volatility widens and BTC shows a discontinuous trend (rather than bullish or bearish). And I believe that reaching new highs could create such a context. Considering risks and benefits, in my view the correct rating is Hold.