BLOX: Crypto income with a growth engine (paid weekly)

BLOX — the Nicholas Crypto Income ETF — is trying to fix the classic income-ETF headache: fat yield, thin NAV. Portfolio manager David Nicholas (XFunds) flips the script: capital appreciation first, income second, with weekly paydays. It’s built for people who like their crypto with a paycheck—and aren’t keen on watching price charts bleed red just to fund distributions.

What problem is BLOX solving?

Many “income” products in volatile assets juice yield by overwriting upside (hello, covered calls) and slowly eroding NAV. Looks great in a screengrab…until you zoom out. BLOX’s pitch: protect the upside, still harvest volatility, and let NAV climb over time. Per Nicholas, the fund’s payout target is ~36% annualized, while the options book aims around ~50% annualized internally, leaving room to support NAV instead of maxing the headline yield.

How it actually works (no Greek letters required!)

• Two sleeves, two jobs

  • Crypto sleeve (BTC + ETH via ETFs): uses call-spread overlays to monetize weekly swings without turning the core crypto exposure into a permanent upside cap. (Per Nicholas, the overlay is structured to harvest vol while keeping meaningful upside participation.)

  • Equity sleeve (10–15 crypto-ecosystem names): custodians (Coinbase/Robinhood), chipmakers (Nvidia/TSMC), miners/“treasury” names, payments/infra, etc. Here, they sell put spreads—you collect premium, and you don’t cap equity upside like a covered call would.

• Why weekly? Investors wanted it. BLOX pays on Mondays, allowing you to redeploy all week. (Also: dopamine.)

• Tax note (U.S. context): Distributions often show up as Return of Capital (ROC) because of spread accounting. That lowers the cost basis rather than showing up as immediate taxable income. Consult with your tax professional, especially if you’re not a U.S. resident.

Okay—how is this different from a Bitcoin-income ETF?

Most Bitcoin-income ETFs are single-asset products that monetize BTC volatility by selling covered calls on BTC exposure. What does BLOX do differently?

Translation: A pure BTC income fund gets paid when BTC wiggles, but sacrifices upside when BTC sprints. BLOX attempts to harvest volatility while maintaining an uncapped path (primarily through equities) for the NAV to actually grow.

Scenario test (thought experiment)

• BTC rips upwards +30%:

  • BTC-income ETF: covered calls likely leave gains on the table; distributions look big, NAV lags.

  • BLOX: crypto overlays may clip a portion of a fast spike, but the equity sleeve (miners, custodians, chips) can outrun BTC on big moves, and BLOX doesn’t cap that equity upside.

• BTC goes sideways (chop):

  • BTC-income ETF: happy place … steady option income, but still capped.

  • BLOX: harvests from both sleeves; equities can still trend (new products, earnings, flows) and you’re not capped there.

• BTC winter:

  • BTC-income ETF: income helps, but NAV can grind lower.

  • BLOX: options income on the crypto sleeve helps offset, and management can dial down beta on equities (e.g., lean chips over miners). Still volatile, just more levers to pull.

Who it’s for (and who should pass)

BLOX suits investors who are bullish on crypto’s long-term prospects and want income without compromising their upside. If you’re comfortable with active management, can live with volatility, and think in multi-year horizons rather than multi-week trades, you’re the target audience.

If, instead, you need cash in 30 days, chase the most significant headline yield, dislike return-of-capital distributions, or expect a stable-value ride, this isn’t your vehicle. It’s still crypto-linked risk, just with a smarter transmission.

What to watch (because nothing’s free)

Volatility cuts both ways. Put spreads can limit (though not eliminate) the downside on the options book, but the underlying equities can still drop significantly when the sector sours. Execution also matters: the edge lives in entry points, strike selection, and rotation, and “active” only helps if it’s done well. Finally, resist headline-yield FOMO. A ~36% target may seem tame compared to 60–80% sticker yields elsewhere, but the key here is total return and a healthier NAV trend, not yield mimicry.

Using it (strategically)

Size positions with intent: for crypto believers, BLOX can be a core satellite; for traditional portfolios, think satellite exposure, not center of gravity. Decide upfront whether you’ll reinvest or spend—DRIP the Monday payouts if you’re compounding, or take the income knowing the design prioritizes NAV over gimmicks. And dollar-cost average with discipline: set a schedule instead of hunting perfect dips; an upside-friendly structure means buying higher can still work if the NAV keeps marching.

The vibe, summed up

BLOX isn’t your grandad’s covered-call grinder. It’s a weekly payer that refuses to exchange tomorrow’s upside for today’s screenshot. If you want pure BTC yield, plenty of funds will gladly cap your future for you. If you want income plus a shot at real NAV growth (and you can stomach crypto weather), BLOX is the one to actually study, not just scroll past.