Before spot BTC ETFs were approved, a asset produced by ProShares was already active. Starting in October 19th of 2021 you could buy this ETF. It produces dividends based on futures trading. So depending how volatile the price action was during that month, and how well the Proshares futures traders did would depend on how much the dividend pay out. Some months the payout may be zero, others its massive. All depends on Bitcoins volatility.
Now I want to point out this is not a spot BTC asset, it does follow Bitcoins price but not closely such as the recent Bitcoin spot ETFs do.
Take a look at the chart above, that is BTC-USD compared to BITO over one year. We can see it does follow the price of Bitcoin. But has some ups and downs but only off by around 5 percent the end of this year. Early this year it followed much more closely. But again that is not what this asset is meant to do, its meant to produce dividends.
Above we can see the BTC-USD chart compared to IBIT. Which is Blackrocks spot BTC asset. It follows so closely we can barely see any divergence.
So lets talk about the dividends, they are what this asset by Proshares is known for.
2023 ranged from 0 up to 20 percent annual dividend yield.
2024 ranged from 11.32 percent all the way up to 67 percent annual dividend yield.
2025 ranged from 48 percent and over 83 percent at its highest for the year.
These are huge yields, most “high yield” dividends do not surpass 5%
Not every month has a guaranteed distribution. It has been 0 on at least one month while I was holding it.
I bought BITO back in 2022 when Bitcoin was around $20,000
Watching previous cycles, I decided this was pretty close to this cycles low. Of course I could be wrong, but based on my observations it was what I decided. And sure enough it was pretty close to the bottom. I held the asset all the way through 2025 and finally sold once I was approaching my buy in price. I set a stop loss for just a percent of two above what I paid for it. And it finally triggered, and I sold all of my BITO assets. I did not want to be at a capitol loss, so I decided to sell before then.
But for many years, it produced an amazing amount of income. And I was not in the red for much at all during the run up. Not until we saw Bitcoin drop back into the $80k range did that happen years later.
So would I buy now? No, I would buy it at Bitcoins bottom for the cycle again possibly. Sometime before the next block halving. But once that next halving is coming up and we see a huge drop in price, it may be a nice asset to hold onto producing income.
Some even say if you rolled all of the dividends earned back into BITO, it would produce more than what a spot BTC ETF or just holding actual BTC can do. Honestly I did not do the math on that, but it is interesting to consider.
We are not there, in my opinion. None of this is financial advise, do your own research and make your own decisions.
But I did want to share my gem I found, and how much it has helped me out producing income for the farm until we can produce it on our own farming garlic which we hope to have our first harvest coming this year.
It's kind of crazy how many options there are for things to do and invest in crypto. I have a feeling they are only going to get more and more.
So true, much to consider.
What is an ETF? In simple terms?
An ETF is like hiring a pro to go to a dangerous market for you. They buy the Bitcoin, verify it’s real, and keep it safe. In return, they give you a share of their shopping basket.
Okay, okay, I understand, thank you. Sounds like an action movie 😱
🤣🤣🤣
If you cannot buy assets directly, this ETF's can be used as an alternative for they are trying to match the stocks you are targeting to buy. Something like that i think.
Thank you, I think I'm understanding; it's something similar to an asset. But it isn't.
Eeyeahh. Lets leave it like that.
An ETF is basically what a modern stock is.
When you say its modern stock, is it a term that was being derived from an old stock that cannot produce any more to sell to the buyers/investors?
Looking for a gem in internet sounds easy but its like you are looking for a pin in a haystack. Thanks for sharing a wonderful story of the garlic. :)
Yep, finding the right gems is key to success.
No problem.
Moving forward 2026 Im going to focus more on my BTC position because this past two years I didnt and kinda hurt after alts barely move, or at least they didnt that much compare to BTC, Im not going to try to catch the bottom but will start buying gradually to accumulate through the years, those dividend yields are crazy high compared to regular dividend stocks but the fact that some months pay zero means you gotta be ready for inconsistent income which can be tough if you're relying on it, although its a nice combo you got there by using dividends to fund farm operations until you can harvest, that does sound like a perfect balance between crypto investment and real world business, something you can actually control, thx for sharing
I feel ya, altcoins did not do so well this cycle. But BTC did okay.
Yeah completely depending on this for income is not suggested, best to hold a basket of multiple dividend producing ETFs so if BITO did not pay out for a month then the others can make up for it.
Thanks, it indeed as been nice to have. And glad to share my experience.
Happy New Year!
May your farm have a bumper harvest in 2026!
Happy new year to you too!
Thanks, I hope all goes well this year for the garlic.
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Before the dividend happened I was was doing COVERED calls on BITO.
Everyone who bought call options got crushed when the dividend started to kick out (normally a stock's dividend will be reflected in an option contract but because it had never happened all the options ended up being mispriced for a while). I ended up selling deep ITM COVERED calls and did pretty well.
It was very tax inefficient though. Dividends and calls have a higher tax rate than a good ole HODL. HODL tax rate is 0 usually lol.
BITO options have very poor liquidity now but when it was the only way to get Bitcoin exposure the liquidity was pretty good.
Random funny, I was reading about short sellers that shorted BITO and when the dividend happened the dividend was getting pulled out of their brokerage accounts and if they did not have enough money to cover they got liquidated 😅
I don't short sell. Fiat inflation makes shorting pretty pointless these days.
As a reminded to everyone here, please do not trade options, futures, or short sell unless you are willing to lose a lot of money.
Thanks for this post! It is very nostalgic for me personally as BITO was my main BTC exposure until I rotated into MSTR.
*NFA/DYOR
Oh interesting, I do not really know what covered calls are. But I have heard of people doing them.
Well depends on how you structure your tax liability. Individuals would have to pay a lot for the ordinary income that these produce. But if you set up a c-corp its a fixed rate. So really depends on how much you are earning a year in dividends to make it worth it or not.
Ah yeah short selling Bitcoin is quite the dangerous thing. Would not recommend.. lol
Oh cool I know about Microstragedy, but never wend down that road.
Interesting, you bought at the right time on that one. With BTC being kind of uncertain right now I wouldn't be a buyer, but in the future this might not be a bad option. I'll keep an eye on it and may buy in the the market looks right! Thanks for the info!