Nicholas Wealth, through its XFUNDS suite, has launched the Nicholas Crypto Income ETF (BLOX), an actively-managed exchange-traded fund designed to provide investors with diversified exposure to the crypto ecosystem while generating potential income through a proprietary options overlay strategy.
BLOX, introduced in collaboration with Tidal Investments LLC, aims to offer access to the growth prospects of the digital asset market alongside an income stream, which is often not present in traditional crypto investments. The fund integrates three components: an Equity Portfolio, a Crypto Portfolio, and an Options Overlay.
The Equity Portfolio allocates investments to publicly-traded companies involved in various segments of the crypto economy, including crypto mining, trading platforms, blockchain technology providers, financial services firms, and companies holding significant crypto assets on their balance sheets. The Crypto Portfolio provides exposure to Bitcoin and Ether through select U.S.-listed ETFs and exchange-traded products, with the flexibility to incorporate additional regulated crypto-linked products as they become available.
BLOX’s actively-managed options overlay primarily involves selling put spreads on the crypto sleeve and selectively writing covered calls or put spreads on equity holdings. This approach is designed to allow for greater participation in asset appreciation while generating income, differing from some strategies that may cap upside potential through call spreads.
David Nicholas, CEO of XFUNDS, stated that BLOX was developed to address investor concerns regarding the volatility and lack of income typically associated with crypto investments. He noted the fund allows for diversified crypto exposure while seeking to generate cash flow through a conservative options strategy.
BLOX is structured for investors seeking diversified crypto exposure with an income component, as well as financial advisors looking for a solution aligned with the income needs of retirees or risk-sensitive clients. By combining growth potential, income generation, and risk management within a single ETF, BLOX aims to offer an accessible entry point for those interested in the crypto economy without the full volatility of direct digital asset ownership.
Nicholas Wealth, established in 2012, focuses on helping individuals secure their financial future by generating income and preserving wealth. Tidal Investments LLC, formed by ETF industry pioneers, provides services and tools for the development, launch, and growth of ETFs.
BLOX is the latest addition to the XFUNDS by Nicholas Wealth suite. Previous offerings include the Nicholas Fixed Income Alternative ETF (FIAX), launched in 2022 to provide income via U.S. Treasury fixed income securities and defined risk option premiums, and the Nicholas Global Equity and Income ETF (GIAX), which debuted in 2024, designed to offer exposure to global equities while selling index call spreads for income.
It is important to note that the BLOX fund does not directly invest in bitcoin, ether, or any other digital assets, nor does it seek direct exposure to the current spot price of these assets. Its exposure to bitcoin and ether is indirect, through U.S.-listed ETFs and exchange-traded products. Investors considering the fund should be aware of the inherent risks associated with investments linked to digital assets, including market volatility, regulatory changes, and technological considerations.
