Against the backdrop of a prolonged correction and signs of a bear market bottom forming, Grayscale has introduced a strategy that allows investors to generate steady income from Bitcoin's volatility. This involves a covered call model, which analysts estimate can yield up to 22% annually.
The essence of the method is simple: an investor simultaneously holds the underlying asset (Bitcoin) and sells call options on it with a predetermined strike price. A fixed premium is charged for selling the option, which generates additional income. This strategy is particularly effective in a sideways trend, where there is neither panic selling nor a confident bullish impulse.
How It Works in Practice
In its analytical report, Grayscale provides specific parameters for a hypothetical scenario. It assumes that the expected volatility for a December 2026 call option with an "in-the-money" strike is 40%, and the spot Bitcoin price is $65,000.
Under these conditions, the covered call strategy can generate about 22% annually if the asset price does not make sharp moves. The breakeven point for the investor is around $58,500, and the yield outperforms simply holding Bitcoin until the price exceeds $72,500. It is important to understand that this model is not just theoretical—Grayscale already uses similar schemes in its ETFs, such as the Bitcoin Covered Call ETF, where managers continuously roll over option contracts to enhance the fund's overall returns.
Signals from the On-Chain Market
Interestingly, this strategy emerges at a time when Glassnode analysts are recording signs of the capitulation phase ending. Particular attention is drawn to a group of holders who bought Bitcoin between July 2024 and July 2025, i.e., near the cycle peak of around $107,000. These investors faced a prolonged drawdown and recorded significant unrealized losses.
The 30-day moving average of realized losses for this category of holders rose above $75 million and then began to decline. According to analysts, such a reversal is often the first signal that the main wave of selling is over. The $69,000 level becomes a key battleground, coinciding with the average purchase price of short-term holders and the 2021 all-time high.
A recovery above this level could provide momentum for growth, while a failure to consolidate could lead to a prolonged flat phase. It is precisely this deadlock situation that will be most profitable for implementing option strategies.
My Expert Opinion: The covered call strategy is not a panacea but a tool for those willing to forgo super-profits in a bull market in exchange for stable income during a consolidation period. The current market dynamics, with signs of seller exhaustion and a lack of catalysts for sharp growth, create ideal conditions for its application. However, investors should remember the risk: with a strong bullish impulse, a significant portion of potential profit will be missed, and if the price falls below the breakeven point, the strategy will not protect against losses.