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Learn how you can earn income or buy Bitcoin-exposure at a discount - using a conservative strategy with the IBIT ETF
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Learn how you can earn income or buy Bitcoin at a discount — using a conservative strategy with the IBIT ETF
Many long-term investors are curious about Bitcoin but aren’t sure how to approach it. Buying cryptocurrency directly can feel risky or overly complex. That’s where IBIT, the iShares Bitcoin Trust, comes in. It’s a regulated, exchange-traded fund (ETF) designed to give you exposure to the price of Bitcoin — in a way that fits into a regular investment account.
But what if you’d like to buy into IBIT only if the price drops — or get paid while you wait?
That’s where a simple and conservative options strategy called a cash-secured put can help.
What this strategy allows you to do
- Earn income now by committing to buy IBIT later — if it falls to a price you’re comfortable with.
- Set a clear entry point for your investment in Bitcoin — through the ETF.
- Use your cash in a more productive way than just sitting idle.
If that sounds like a fit, keep reading.
Important note: The strategies and examples provided in this article are purely for educational purposes. They are intended to assist in shaping your thought process and should not be replicated or implemented without careful consideration. Every investor or trader must conduct their own due diligence and take into account their unique financial situation, risk tolerance, and investment objectives before making any decisions. Remember, investing in the stock market carries risk, and it's crucial to make informed decisions.
The real-life example: IBIT $55 Put Option (expires 13 June 2025)
Let’s say IBIT is currently trading at $59.05.
You’re interested in owning it — but only if the price drops to $55. You could just wait and hope it gets there. Or, you could get paid now for being willing to buy it at that price.
That’s exactly what this strategy does.
- Option sold: $55 strike price
- Expiration date: 13 June 2025 (28 days from now)
- Cash required: $5,500 (to buy 100 shares at $55)
- Premium received: $124 (paid to you immediately)
- Breakeven price: $53.76
What could happen?
| IBIT Price at Expiry | What Happens | Net Outcome |
|---|---|---|
| Above $55 | You don’t buy the shares. You keep the $124 income. | +$124 return on $5,500 in 28 days (2.25%) |
| At or below $55 | You buy 100 shares of IBIT at $55. Effective price: $53.76 | You now own the ETF at a discount |
| Far below $55 | You must still buy at $55, even if market price is lower. | Same risk as owning the ETF outright, minus the $124 income |
So what exactly is a cash-secured put?
Let’s simplify the term:
- A put option gives someone else the right to sell you a stock or ETF at a specific price.
- If you sell that option, you’re agreeing to buy it — but only if the price drops.
- Cash-secured means you’ve already set aside the full amount of money needed to buy, just in case.
So you’re saying: “I’m happy to buy IBIT at $55 if it drops — and I’ll take $124 right now for making that offer.”
It’s similar to setting a limit order, but with the added benefit of getting paid up front.
Why long-term investors consider this
- You only risk buying something you want to own anyway.
- You define your entry price in advance.
- You earn income for your patience — while your cash is reserved.
- The strategy is low maintenance and works well for buy-and-hold investors.
What are the risks?
- If IBIT falls well below $55, you’re still obligated to buy it at $55.
- Your cash is tied up for 28 days, earning no other return.
- IBIT is tied to Bitcoin, which can be volatile. The premium offers a cushion, but not protection against large drops.
The table below can help clarify the financial impact of different outcomes:
| IBIT Price at Expiry | Assigned to Buy? | Effective Purchase Price | Net Result |
|---|---|---|---|
| $59.00 | No | – | +$124 |
| $55.00 | Yes | $53.76 | $0 |
| $50.00 | Yes | $53.76 | –$376 |
| $45.00 | Yes | $53.76 | –$876 |
Frequently asked questions (FAQ)
Q: What if I don’t want to buy IBIT at all? Then this strategy isn’t for you. Only use it if you’re willing — and financially able — to own the ETF at the strike price.
Q: What happens to the premium I collect? You receive it up front, and it’s yours to keep — regardless of whether you buy the ETF later.
Q: Is this safer than just buying IBIT today? It depends on your view. You might get it at a lower price, but you might also miss out if IBIT rises and never drops to $55.
Q: Can I lose money? Yes. If IBIT drops significantly, you could face losses just like any ETF investor — although the premium slightly offsets that.
Q: What’s the worst-case scenario? You’re required to buy IBIT at $55, and its market price drops well below that. Your maximum loss is similar to owning the ETF directly, reduced by the premium you received.
Final thoughts
If you're considering long-term exposure to Bitcoin and prefer to avoid the complexity of crypto wallets or exchanges, IBIT may be a suitable option. And if you're willing to be patient — and hold cash while waiting for a better price — selling a cash-secured put offers a structured, disciplined way to enter.
You can either collect income now or potentially own the ETF at a lower price. It’s not a shortcut or a guarantee — but for the right investor, it’s a smart way to stay engaged without chasing the market.
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