Summary The Nicholas Crypto Income ETF offers exceptional total returns and weekly payouts, outperforming both crypto peers and Bitcoin since its June 2025 inception. BLOX's active management and flexible options strategies drive its success, enabling a 38.76% annualized yield without sacrificing growth for income. Key risks include short performance history, reliance on manager skill, and broad crypto industry exposure, making conviction in the sector essential. I rate BLOX a buy for income investors bullish on crypto, recommending it as a partial or full allocation within cryptocurrency portfolios. High-yield ETFs that offer more than 20% yields have become extremely popular over the last few years as investors are allured by the idea of earning a full-time income with just a few hundred thousand dollars invested. Certainly, being able to retire on a $100K per year income with just $200-300K invested is amazing, but it's almost always too good to be true. You see, nearly all of these high-yield ETFs come with the same catch. In return for high yields, upside is capped, NAV is lost, and funds are often doomed to continual reverse splits and dividend payout reductions to maintain lofty high yields. That said, not all high-yield ETFs suffer from this fate, and the Nicholas Crypto Income ETF ( BLOX ) is looking to prove itself. In BLOX's short history since its inception on June 16, 2025, the fund has done exceptionally well. It has outperformed just about all its high-yield crypto peers in both total and price returns. Moreover, BLOX has even outperformed Bitcoin itself while paying weekly distributions, with the most recent one on October 10, 2025, annualizing to a 38.76% yield. Of course, there are only a couple of months of data for a fund whose performance relies heavily on successful active management, and it is prudent for investors to expect that BLOX can underperform just as much as it outperformed. Even so, BLOX can still be valuable to income investors bullish on the cryptocurrency industry. The fund's active selection of assets has so far aided in the fund's performance, and its options trading strategies have the flexibility to allow the fund to capture more upside than the typical covered call ETF. I rate BLOX a buy and recommend income investors use it as a part of or as their entire allocation to cryptocurrencies. BLOX's Outperformance And Weekly Payouts BLOX has performed beyond expectations since its inception. Price and total returns have far exceeded all popular competitors at 27.55% and 45.78%, respectively. Other crypto portfolio plus income funds, such as the REX Crypto Equity Premium Income ETF ( CEPI ) and YieldMax Crypto Industry & Tech Portfolio Option Income ETF ( LFGY ), have offered the next best returns, but still lagged BLOX by more than 20%, not to mention that many similar funds, such as LFGY, have seen share price declines. Data by YCharts BLOX has not sacrificed yield for growth nor vice versa. Though not as high as LFGY's 80.41% , BLOX's most recent distribution still annualizes to an approximate 38.76% yield and is in line with CEPI's 41.58% . These distributions are also paid weekly and have been generally pretty stable with a standard deviation of 1.17%. What's good to note as well is that in various interviews with the fund manager, David Nicholas, he has mentioned that the fund internally attempts to generate an annualized 50% of its NAV in option premiums every week, but will generally distribute about 36% and leave the rest for reinvestment. These numbers, of course, can change without warning, but they do help set some expectations for income investors. Data by YCharts However, what's truly astounding is not BLOX's outperformance relative to other income funds, but its outperformance relative to Bitcoin itself. In the time since BLOX's inception, BLOX has generated a 45.78% total return when the iShares Bitcoin Trust ETF ( IBIT ) had only generated 3.24% and a popular Bitcoin treasury company in Strategy ( MSTR ) had actually fallen significantly in value. Data by YCharts How can this be possible? Well, let's take a deeper look at how BLOX operates. BLOX's Active Management Is Key Active management is the key to BLOX's success. The fund has a 1.03% expense ratio that goes towards fund managers who are consistently working to find profitable option trades and cryptocurrency picks. This is a far more sophisticated fund than your typical covered call ETF. Per its prospectus, BLOX can use a variety of options selling strategies, including but not limited to selling covered calls, credit spreads, diagonal call spreads, cash-secured puts, calendar call spreads, and collars. This flexibility has been key to BLOX's success because it has largely been selling put spreads on its equity positions and call spreads on its spot Bitcoin and Ethereum ETF holdings. The put spreads have been the main contributors to BLOX's strong returns, as it is a strategy that does not cap upsides. Instead, selling puts is a strategy that has more downside risk, as you're essentially writing a contract that states you will buy the underlying asset at a certain strike price even if the asset falls below that price. If the asset rises or remains above your strike price, the contract will expire worthless, and you'll keep the option premiums earned. And in the case of BLOX, many of these option trades have been hugely profitable, as many of BLOX's underlying equity holdings have had impressive returns since BLOX's inception. The following charts compare the total returns of BLOX's underlying equity holdings since BLOX's inception. Data by YCharts Data by YCharts Looking at BLOX's underlying holdings is a good segue into a discussion about the second part of BLOX's active management. Unlike many actively-managed options trading ETFs, which will typically have constant or passively managed underlying holdings to write options on, BLOX's underlying holdings are actively selected. The fund managers have provided guidance in their prospectus where 25-50% of assets will go toward equity holdings related to cryptocurrency, 25-50% toward crypto assets generally via ETFs, and 25-50% toward trading collateral and buying protective options as needed. In each category, BLOX has provided further guidance. Equity holdings related to cryptocurrency, or "Crypto Industry Companies" as BLOX defines it, include companies that derive 50% or more of their revenues from the following sectors: Crypto asset mining Blockchain technology development Crypto asset trading platforms Digital wallet providers Decentralized finance ("DEFI") platforms Companies involved in the development of smart contract technology Manufacturers and distributors of hardware related to crypto asset Companies providing blockchain-as-a-service Interactive platforms and services related to NFTs Crypto asset cross-border payments Crypto asset tokenization Crypto asset decentralized lending Companies that hold at least $50 million of crypto assets on their balance sheet A broad selection criterion was purposely developed to make BLOX a fund for those bullish on the cryptocurrency industry as a whole rather than individual coins or companies. That is why BLOX also uniquely holds and writes options on both Bitcoin and Ethereum ETFs. Currently, BLOX has an approximate 14% weighting in each of the VanEck Bitcoin ETF ( HODL ) and Fidelity Wise Origin Bitcoin Fund ETF ( FBTC ) and another 9% in the iShares Ethereum Trust ETF ( ETHA ). The latter is another big reason why BLOX has outperformed Bitcoin as Ethereum has had a fantastic run during a time when Bitcoin had ultimately traded flat. Data by YCharts BLOX's Key Risks But just as how active management has led to significant outperformance, it can also become the reason for significant underperformance. What happens if the fund managers select the wrong options strategy and/or the wrong stock at the wrong time? If we just take a look at selling put options as an example, if BLOX's equity holdings had significantly fallen in value instead of rising, those put options would have led to increased losses and downsides. Investors need to remember that we have been in market conditions that have generally been very good for cryptocurrency. The four months since BLOX's inception are too short to give investors adequate information on how BLOX will perform during crypto bear markets. And speaking of crypto bear markets, the state and future of cryptocurrency is naturally another risk to consider. After all, the high yields in these crypto income funds are only produced because of the high implied volatility ("IV") in the underlying assets, and this high IV comes from the uncertain future ahead of various cryptocurrencies and related companies. Just Bitcoin itself has many polarizing and conflicting viewpoints. Saifedean Ammous, the author of the popular book, The Bitcoin Standard , had expressed how Bitcoin was supposed to become a reserve currency that the global economy pegs their currencies to similar to how gold operated in the past. Roger Ver, author of Hijacking Bitcoin , however, discussed in his book how Bitcoin was never supposed to be a speculative store of value and was originally designed to be a medium of exchange. Regardless of what you believe, the future of cryptocurrency is very uncertain, and you must have conviction in the industry for an investment in BLOX to make sense. Additionally, if you are an investor who does have a particular view on cryptocurrencies, BLOX's goals of generating exposure to the cryptocurrency industry as a whole may not be in your favor. For example, some may have heard of the term " Bitcoin Maximalism ." This is the belief that Bitcoin will be the only relevant cryptocurrency in the future, and if you hold this belief, BLOX would contradict your view with its large exposures to Ethereum. BLOX can also be a contradictory holding for investors who view cryptocurrencies as a separate asset class to be diversified in. Publicly-traded cryptocurrency companies ultimately do not escape broad market sell-offs, and this risk is even more pronounced considering BLOX's holdings in NVDA and TSM, which are companies whose fundamental business models are not driven by cryptocurrencies themselves. BLOX Verdict Overall, however, BLOX has stood out from other cryptocurrency income funds with its impressive total returns and consistent weekly payouts. The fund does come with risks in its very limited history and reliance on active management, but the flexibility that this active management provides does make BLOX appealing to income investors bullish on the cryptocurrency industry as a whole. I rate BLOX a Buy and recommend investors primarily consider it within their allocations to cryptocurrencies.
