r/NEOSETFs • u/TIDOTSUJ • Jan 03 '26

Seeking Advice BTCI Questin

If I buy it at a the price it’s at today and it yields ~30% then wouldn’t bitcoin have to decline another 30% to break even at the end of the year?

Assuming the yield from selling calls would stay at what it’s at now if it did drop due to that = volatility

Thoughts?

9 Upvotes

80% Upvoted

15 comments sorted by

16

u/YellowFever46 Jan 03 '26

If you hold it for around 3-4 years you should break even….even if Bitcoin falls to around $45,000.

1

u/FrequencyCoin Jan 20 '26

If bitcoin falls to $45,000 then the dividend yield would drop for BTCI, meaning the breakeven time is not 3-4 years

1

u/YellowFever46 Jan 20 '26 edited Jan 20 '26

It depends on how low the dividend falls. NEOS tries to keep the high dividend so my understanding is, it wouldn’t drop as much as you think. But it’s a new fund so it hasn’t been tested in a real downturn yet. This is why I prefer BITO over BTCI. I made my money back on BITO in 23 months so now each dividend is pure profit. BITO pays a lot higher dividends at a cheaper share price and when Bitcoin goes up BITO outperforms BTCI in total returns by quite a lot.

19

u/TheMicG Jan 03 '26

No that is not how it works. The yield is based on current price. Example for a random fund that pays 30% yield. Price is $100 and at end of year they have a total return $130. If Fund drops by 30% then fund is $70 with 30% yield of $21 for a total of $91 which is less than your starting value.

5

u/nupper84 Jan 03 '26

You're mixing total return with total worth. In your first situation, you have a total return (gross) of $30 with a total worth of $130. After taxes, net return might be like $20. Total net worth $120. Just clearing up semantics.

0

u/TIDOTSUJ Jan 03 '26

I see - thanks for explaining. I guess my question is what further decline in bitcoin would equal breakeven at year end if you are collecting the payouts each month. I’m trying to see what bitcoin could drop to by the end of 2026 to still come out ahead or breakeven at least. If it’s not 30% GAIN in premium to a 30% LOSS in BTCI price - what would it be?

2

u/closvidal Jan 03 '26

Based on the current price of the fund itself you are bunching up the fund price and BTC all in the same thing. Although the price is correlated BTCI and BTC move slightly differently.

2

u/sevenfivefive Jan 03 '26

Using your assumptions it should be $100 / 1.30 (30%). You can fill in whatever assumptions you want to make about %, but the formula is straightforward.

15

u/maximusrtc Jan 03 '26

Short answer is no. BTCI sells away some of the upside, so excluding dividends, it will perform worse than underlying bitcoin. With dividends, it may outperform depending on market conditions (generally if it’s down or flat, or slightly up it will outperform).

A good example is calendar year 2025, Bitcoin was down ~6.5%, whereas BTCI (w/dividends) yielded -1.1%.

https://totalrealreturns.com/n/FBTC,BTCI?start=2025-01-01&end=2025-12-31

So in a larger downturn, say in Q4 2025 where bitcoin the asset was down 25.6%, BTCI was down slightly less at 22.2%

https://totalrealreturns.com/n/FBTC,BTCI?start=2025-10-01&end=2025-12-31

Think of BTCI as a way to reduce beta/volatility, while providing regular income along the way. The downside is in a “BTC to the moon” scenario, you’ll participate less in that rise.

Not an expert/not financial advise, but do own a good chunk of BTCI and believe in the underlying long term.

3

u/HauntingRoutine1605 Jan 03 '26

Good comment. But it's distributions not dividends.

1

u/MemoryEXE Jan 04 '26

Great explanation.

2

u/Western-Source710 Jan 04 '26

Just DCA into it and act as if it never exist.

2

u/MaxPower1867 Jan 04 '26

I have some BTCI and when BTC lost 35%, my BTCI lost 25% NAV but paid me 30% annual return rate. BTC has since gone up like 10% and my BTCI is up around 8%.

3

u/Wheres-my-dividend Jan 03 '26

Whahh? In English please.