Summary Nicholas Crypto Income ETF (BLOX) prioritizes growth, leveraging aggressive income strategies and direct crypto exposure, with a primary focus on Bitcoin and related equities. BLOX employs dynamic options strategies—synthetic covered calls, credit call spreads, and overlays—tailored to market conditions to capture both volatility-driven growth and high income. The ETF’s performance closely tracks Bitcoin, outperforming during rallies and offsetting declines with robust income, supporting a bullish long-term outlook. I expect BLOX’s flexible strategy and high yield to attract more investors, especially if Bitcoin’s growth trajectory persists. In the growing high-income segment of the market, Nicholas Crypto Income ETF ( BLOX ) has taken a different approach than most, if not all of its competitors, by embracing a strategy of growth first and income second. That may not sound different for the general market, but its stated goal of growth first is accompanied by an aggressive income strategy that separates it from stocks that are considered growth and income holdings. Within the high-income complex, it also differentiates by owning some of its holdings, which exposes it to more growth potential while limiting the downside when the underlying corrects. The main focus of BLOX is on Bitcoin and/or Bitcoin-related stocks specifically, and the overall crypto sector in general. So, when the price of Bitcoin fluctuates, it will move in correlation with the price - both on the higher or lower end of the price movement. In this article we'll look at why I'm very bullish on BLOX and the tools it uses to generate both growth and income. How it generates growth and income First, as with all of the high-yield ETFs, BLOX uses cash holdings or U.S. Treasuries as a source of collateral in order to support its options contracts. Among the areas of interest in the crypto sector BLOX looks for are, "companies engaged in crypto asset mining, blockchain technology development, crypto asset trading platforms, financial services related to the crypto asset industry, payment processing, digital wallet services, decentralized finance ( DEFI ) platforms, non-fungible token (NFT) related platforms and services, as well as technology providers within the crypto industry and companies that invest directly in crypto assets." The top ten holdings of the company account for 62.98% of the total holdings, as of 1-23-2026. The company states that it will usually hold anywhere from ten to twenty different crypto companies at any one time. BLOX Website As for its growth strategy, fund managers will utilize options like credit call spreads, covered calls, and synthetic covered calls for the purpose of targeting the volatility of the share price returns of the various holdings it takes a position in or writes options against. Synthetic covered calls BLOX does use a synthetic covered call strategy in order to generate more income even while its primary focus in growth. For those that are unaware, a synthetic covered call is different than a traditional covered call in that it doesn't own the underlying, while traditional covered calls do own the underlying stock or ETF it's selling or acquiring options against. Again, the major goal here is to take full advantage of the volatility in price movement of the underlying security. While I like this as part of its strategy, if this was all the fund did, it wouldn't be any different than many other synthetic covered call ETFs. Credit call spreads On the growth side of the investing equation, BLOX utilizes credit call spreads in order to produce more growth from the increase in share price of the underlying. At the same time, it's able to capture a moderate amount of net income premium. It won't be as much as the synthetic covered call will generate, but it's a good complement to them. This strategy is primarily used when a fund manager believes there's a strong probability the share price of the underlying will jump over a short period of time. It can also be used if the fund manager considers that the out of-the-money options are being undervalued by the market. Using that strategy under certain conditions can result in an total return outperformance over the synthetic covered call strategy mentioned above. Options overlay In relationship to option overlays, BLOX attempts to generate income by utilizing options contracts on its underlying securities. It has the flexibility to write options against some or all of the underlying. This strategy can be used to boost growth and income, or to protect the downside if there is a meaningful correction in the crypto sector. Combination of strategies What's very attractive and compelling to me concerning BLOX is its utilization of various options strategies, based upon changing market conditions, while at the same time owning some of the securities it's writing options against. In other words, fund managers can use a synthetic call strategy when seeking to boost income; credit call spreads when looking to increase the growth side of the fund, and option overlays when focusing on growth and income together, or to protect the downside of the share price when conditions warrant it. The point is it offers fund managers the flexibility to respond to different market conditions they face on a consistent basis. Not only that, since its inception fund managers have shown they can effectively deploy the tools at their disposal for the benefit of investors. The result of the strategy has resulted in some solid results. Now if you were to look at the chart of BLOX, it may appear to be vastly underperforming, but I've owned the ETF for a while and have found it to perform as it's designed to do. Seeking Alpha Since it's primarily affected by the price movement of Bitcoin, there isn't a lot any fund manager can do when the share price of Bitcoin corrects, as it has recently. That said, when the price of Bitcoin did soar in 2025, the share price of BLOX moved up with it, confirming that the growth strategy employed by BLOX fund managers is one that works. It also confirms that management is focused on growth as its primary goal. Also important is the fact BLOX outperformed Bitcoin when its share price climbed, suggesting to me the management has the potential to surprise to the upside when the inevitable price trajectory of Bitcoin reverse direction. Distributions and yield BLOX has paid out a consistent weekly distribution since its inception, ranging from a low of $0.12 to a high of $.1845. It has generally generated more per share when the price of Bitcoin is higher, and less per share with the price of Bitcoin drops. That's because of its significant indirect exposure to Bitcoin across its basket of holdings. When the price of Bitcoin corrected, starting in early October 2025, the share price of BLOX and its distributions paid out declined with the correction. My belief is Bitcoin is going to continue in a growth trajectory for some time into the future, so BLOX is likely to boost its distributions as it also enjoys growth - assuming it takes similar action in regard to its distributions as it has in the past. The distribution data below show how the fund paid out higher and tighter yields until October when they started to decline. Even so, it has still managed to maintain a solid yield, testifying to the successful implementation of its strategy. Seeking Alpha Expense ratio The expense ratio of BLOX stands at 1.03%, compared to its closest competitor, LFGY, which has an expense ratio of 1.02%. Another fund with exposure to a number of holdings BLOX has is STCE. Its expense ratio is 0.30%, but it doesn't really compete with distributions, as the payout for that fund is only 1.64%. With its growth potential and high distribution yield, I don't see this being much of an issue for the company, and at least for me, it doesn't really factor into my decision on whether or not to take a position in the company. Conclusion BLOX is one of my favorite holdings in the income portion of portfolio, and I think, if fund managers are able to continue to perform as they have been since its inception, investors are going to be pleased with both growth and income from the fund in the years ahead. The ETF will remain volatile, but if it's able to participate in the upside as it has in regard to the upward price movement of Bitcoin, this is probably going to produce a lot more interest from retail and institutional investors, which will likely result in even more upside under favorable market conditions. Assuming it continues to ride the Bitcoin wave when the price finds support and growth, shareholders will enjoy a prolonged period of growth while receiving a high distribution yield that'll bolster their income. Another final thing to consider is, even when the price of Bitcoin reaches another ceiling, the income BLOX produces should be more than high enough to offset much of the decline in share price when that happens. And when considering total returns, whatever income has been received should also result in positive total returns even in a bear market. If the fund can continue to perform as it has in its relatively short past, and if you believe that the growth trajectory of Bitcoin is going to continue on in the long term, BLOX is an ETF that deserves your attention.
