You've probably seen the headlines about crypto making people rich overnight. It’s a wild story, but for most folks trying to manage a retirement account or a steady brokerage portfolio, "wild" is the last thing they want. They want growth, sure, but they’d prefer not to wake up and find 40% of their money evaporated because of a midnight tweet. This is where the Nicholas Crypto Income ETF (ticker: BLOX) steps in, trying to play a game that feels almost contradictory: turning the heart-attack volatility of digital assets into a steady stream of cash.
Honestly, it’s a bit of a weird beast.
Launched by David Nicholas and his team at Nicholas Wealth Management, this fund doesn't just buy Bitcoin and hope for the best. It’s an actively managed strategy. Think of it as a three-legged stool. First, you have the "pure" crypto exposure via spot Bitcoin and Ether ETFs. Second, you’ve got the "pick and shovel" stocks—companies like Coinbase (COIN), Marathon Digital (MARA), and even Nvidia (NVDA). Third, and this is the part that either makes you love it or leave it, is an aggressive options overlay.
Why the Nicholas Crypto Income ETF is different than a HODL strategy
Most people looking at crypto just want the price to go up. To the moon, right? But the Nicholas Crypto Income ETF isn't built for moonboys. It’s built for people who want to participate in the "digital gold" rush but need a check in the mail (or a deposit in the account) every month.
By selling covered calls and putting other options strategies to work, the fund managers are basically harvesting volatility. They take that crazy price movement that keeps you up at night and sell it to speculators. In exchange, the fund collects "premiums." That’s where the income comes from. As of early 2026, we've seen distribution rates that would make a traditional bond investor faint—sometimes hovering in the 30% to 35% range.
But wait. There is a massive catch.
If Bitcoin pulls a 200% rally in a month, BLOX is going to lag. Hard. Those options "cap" the upside. You’re trading the chance of a life-changing windfall for the certainty of a high immediate yield. It’s a trade-off that many income-focused investors are willing to make, especially when the alternative is 4% in a savings account.
Breaking down the portfolio: What's actually inside?
It isn't just a Bitcoin proxy. If you peek under the hood of the Nicholas Crypto Income ETF, you’ll find a mix that looks more like a tech-heavy equity fund with a crypto addiction. As of the latest filings in January 2026, the fund has been holding significant stakes in:
- Crypto Infrastructure: Miners like IREN and Riot Platforms. These companies are high-beta, meaning they move even more violently than Bitcoin itself.
- The Exchanges: Coinbase is a staple here. It's basically the toll booth for the entire industry.
- Direct Crypto Exposure: Using the heavy hitters like the Fidelity Wise Origin Bitcoin Fund (FBTC) and the iShares Ethereum Trust (ETHA).
- The Options Overlay: This is the invisible engine. The fund writes contracts against these holdings to generate that fat yield.
The management team, led by David Nicholas, Jay Pestrichelli, and others, handles this actively. They aren't just setting an algorithm and going to lunch. They are adjusting the "strike prices" of those options based on whether they think the market is about to rip higher or crater.
The risk nobody talks about (but should)
Let’s be real for a second. You can’t get a 30% yield without taking on some serious heat. The Nicholas Crypto Income ETF has an expense ratio that usually sits around 1.03%. In the world of Vanguard index funds that cost 0.03%, that looks expensive. But you aren't paying for a passive index; you're paying for a team of traders to manage a complex options book 24/7.
The real danger is "NAV erosion."
If the underlying stocks and crypto assets fall faster than the options premiums can cover, the Net Asset Value (NAV) of the fund drops. You might still get your monthly distribution, but the total value of your investment is shrinking. This happened to several "yieldmax-style" funds in the past. BLOX tries to mitigate this by being more selective with the equities it holds—focusing on companies with actual balance sheets rather than just meme stocks—but the risk remains.
It’s also worth noting the tax implications. Because this fund generates income through options and frequent trading, it’s often throwing off "ordinary income" rather than "qualified dividends." If you hold this in a standard brokerage account, Uncle Sam is going to take a bigger bite than he would from a long-term capital gain. Most experts suggest looking at these types of high-income ETFs for tax-advantaged accounts like an IRA or 401(k).
Is the yield sustainable in 2026?
We are currently in a market where crypto is becoming "boring" institutional infrastructure. With the passage of the GENIUS Act and more banks custodying digital assets, the extreme 100% volatility days are becoming rarer.
When volatility drops, the "rent" the fund can charge through its options strategy also drops.
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However, "lower" volatility in crypto is still 5x higher than volatility in the S&P 500. So, while the 36% yields we saw in late 2025 might normalize, the Nicholas Crypto Income ETF is still positioned to out-yield almost anything in the traditional fixed-income world. The fund recently announced a monthly distribution of $0.1245 per share for January 2026, which keeps it firmly in the "high-yield" category.
Practical steps for the curious investor
If you’re thinking about adding the Nicholas Crypto Income ETF to your portfolio, don't just dump your life savings in because you saw a high percentage sign. Treat it like a "satellite" holding.
First, check your current exposure. If you already own a lot of Nvidia or Coinbase, you might be doubling down on the same risks.
Second, decide what you need. Are you looking for a way to pay your monthly bills? If so, the monthly payout structure of BLOX is great. But if you’re 25 years old and trying to build a nest egg for 40 years from now, a simple Bitcoin ETF without the options overlay might actually serve you better because it allows for uncapped growth.
Lastly, watch the "Premium/Discount" to NAV. Because BLOX is an ETF, it trades on an exchange like a stock. Sometimes the price you pay is higher than the value of the assets inside. Try to buy when it's trading close to its Net Asset Value to avoid overpaying on day one.
The Nicholas Crypto Income ETF represents a new era of "yield-ified" crypto. It’s a tool for a specific job: generating cash from a volatile asset class. As long as you understand that you're trading away the "to the moon" lottery ticket for a steady paycheck, it’s one of the most sophisticated ways to play the digital asset space today.
To move forward, compare the total return (price change + dividends) of BLOX against a standard Bitcoin ETF over the last six months. This will show you exactly how much upside you're sacrificing for that monthly income. Check the fund’s latest fact sheet on the Nicholas Wealth website to see if their current "option delta" matches your personal risk tolerance.