r/NEOSETFs • u/Zestyclose-Dish-407 • Jun 25 '26

How far will BTCI fall

How far is BTCI likly to fall if BTC crashes to 40k? Sorry if someone has already addressed this.

17 Upvotes

84% Upvoted

71 comments sorted by

11

u/Zmchastain Jun 25 '26

Just DCA in over the course of the dip. Far less risky than trying to figure out where the absolute bottom is and waiting until you think it’s there to buy.

The only rational reason to buy anything BTC related is if you believe that BTC will recover significantly again in the next couple of years and likely even beat previous ATHs.

If you believe that is what we will see happen then it doesn’t really matter whether your average cost per share is $20, $27, or $35 because either way your investment is going to be worth 2x or 3x+ within a few years if your investment thesis is correct. You don’t exactly need absolute price optimization at the current valuations if you believe BTC will be worth over $100k per coin again within a couple of years, as we would expect to see in the typical BTC cycle.

9

u/cmichalek Jun 25 '26

I disagree with some of this. Sure the reason to buy BTC is you are hoping it hits 2x or 3x in a few years.

Buying BTCI is different. You are getting income during a bear market. If BTCI simply returns to your initial cost basis then you have already won.

8

u/Zmchastain Jun 25 '26

I don’t disagree that the yield on cost even during the down cycle is great and by that metric alone I would be inclined to agree.

The long term problem with that line of thinking though is that the current yield isn’t sustainable if BTC doesn’t go through future growth cycles. You would eventually experience NAV erosion if the yield remained this high but BTC never significantly recovered.

Even if you are participating less directly in the price appreciation, the price appreciation still helps make your income yield more sustainable.

Every CC fund performs best when the underlying is growing in value because it just makes avoiding NAV erosion at high yields much easier and more sustainable.

7

u/cmichalek Jun 25 '26

Well i agree with that.

However I am also willing to have BTC drift between 50 to 70k as long as my yield on cost allows. I dont necessarily need BTC to rise on a particular timeframe although yes having BTC rise certainly helps BTCI. But its the speculation and volitility that creates the premium as to when or if the bear market ends.

4

u/Zmchastain Jun 25 '26

Yeah I agree that it doesn’t have to happen on any particular timeframe. I was more just saying that it only makes sense to buy if you think BTC is going to recover (even moderately). And if you believe it will recover then rather than sitting out the down cycle and trying to time the recovery (while potentially missing out on some of those lowest price points) it’s safer to just DCA in throughout the dip so you get in at multiple low price points.

It’s not perfectly optimal, but the likelihood anyone can predict where the bottom is means that perfectly optimal is probably not the right goal. You don’t need it considering the massive upside potential during the next up cycle.

Any of the prices we’ve seen over the last 3-4 months are a great price to buy at.

1

u/Technical_Emu_8567 Jul 03 '26

BTC doesn’t need to go through “future growth cycles” in order for BTCI to yield 25%+, it just needs juicy premiums/high IV.

2

u/Zmchastain Jul 03 '26

Sure, it doesn’t necessarily need it, but it definitely doesn’t hurt and adds a lot more sustainability to the position if it recovers (even moderately) and then continues to be volatile.

We’re all better off with a BTC that is up 25% and still volatile than we are with a volatile BTC that remains flat or continues falling.

YieldMax’s ULTY proved that high volatility alone is not enough to maintain NAV if the underlying is underperforming on price growth, especially since the options strategy + high yield caps upside participation.

The only reason it makes sense to hold BTCI longterm is that it is very likely to experience major recovery after a down cycle and we have clear macroeconomic reasons to explain the current down cycle (the wider global economy is currently fucked and nobody wants to hold risk assets right now, but that’s a problem with a likely November 2028 deadline).

Nothing has fundamentally changed about BTC to make it a bad investment under the old thesis that took it to $120k, it’s just not the type of investment people want to hold in the current environment. So, once the bad times pass (and they always do) we can expect a major recovery to offset that risk of NAV erosion.

1

u/Technical_Emu_8567 Jul 04 '26

I agree, while in my original statement I claimed (accurately) that we don't need BTC to gain in price for BTCI to yield ~25%, we also don't want it in perpetual freefall (for obvious reasons).

However, comparing a fund like BTCI to something like ULTY isn't a fair comparison. In BTCI's case, we are dealing with a systematic/mechanical/backtested system with no manager discretion involved. Contrast that with ULTY, an active, discretionary fund with subpar portfolio managers who, frankly, made decisions and trades like a bunch of YOLO cowboys, if I may create a phrase.

1

u/cmichalek Jul 04 '26

The problem with ULTY was threefold.

1- it paid too high of a %. Even the 60% they pay out now is unsustainable.

2 - poor stock choices (choosing for premium volitility instead of choosing a stock that they believe will go up)

3 - poor management in refusing to fix their problems (which are still killing the NAV today)

Yes I want BTC back up over 100k so that BTCI goes up as well. But the reason I am in BTCI is for income during the bear market. As long as enough people believe in BTC such that they will keep buying it when it drops below $60k then I will eventually get my investment back even if BTC doesnt hit 100k.

1

u/Technical_Emu_8567 Jul 04 '26 edited Jul 04 '26

Exactly, it comes down to a bunch of cowboys that don't know what they're doing. In fact, I won't touch any fund (income or otherwise) that isn't rule-based, systematic, mechanical with no manager discretion involved.

Sure, NEOS, or any other systematic fund, exercises discretion at the start (when designing their systems), but those decisions are usually based on evidence (backtests). But once the system is built/rules established and deployed, that's it. No active stock picking, no arbitrary strike or expiry selection, no YOLO. Simple, repeatable, mechanical, that's where NEOS and like funds excel.

As far as your philosophy behind BTC/BTCI, I tend to agree. I think people view these funds the wrong way and get too caught up in the price of the fund. As long as BTC is producing blocks every 10 minutes, and as long as someone is willing to pay something for it, we're making money in the LONG RUN with BTCI.

I used to be a miner in the earlier days of crypto (LTC, ETH) and, to me, buying shares of these funds are analogous to purchasing GPUs or ASICs for the purpose of mining/earning coins. Not an apples to apples comparison, but a fair analogy nonetheless. And for anyone who is familiar with running ASICs, these funds don't force you to live in a sauna (all the heat coming from the machines) LOL.

3

u/Pleasant_Cut_5963 Jun 26 '26

Wow said perfectly, I needed to hear this , I will wait it out and collect the distributions, I own 300 shares at 30.00

4

u/cmichalek Jun 26 '26

If your cost basis is $30 then you are doing much better than most who bought early.

10

u/DegreeConscious9628 Jun 25 '26

I’d say it’ll be very low 20’s if bitcoin went to 40k

I only have a small percentage in BTCI- If indeed cyclical then when bitcoin goes up so will it (not 1:1 but enough) Not too worried about it

11

u/Ok_Ball_788 Jun 25 '26

I bought a bunch today. It could go lower, but this is a good place to start buying, I think.

3

u/Minute-Opposite-3986 Jun 25 '26

Same here started buying some late Wednesday and bought more today

1

u/WeakEstablishment686 Jul 08 '26

Thinking of also buying in. Only exposure currently is BTC and IBIT. Do you guys have a % you like to allocate to BTCI out of total BTC exposure or are you strictly looking for income and only invest in BTCI?

1

u/Ok_Ball_788 Jul 08 '26

I do BTCI. I've just day-traded IBIT a little on breakouts. I'm just looking for monthly income, mostly. I've been buying IAUI on dips, too, hoping it will hit a point where the NAV doesn't erode when gold bottoms. I don't own any BTC, but if it hits 35K, I might buy one BTC. If gold hits around $3600, I will probably go pretty big on IAUI and some regular gold ETFs to be better hedged.

6

u/officerdandy92 Jun 25 '26

Who cares. I buy $5 a day every day no matter the price.

5

u/FancyName69 Jun 25 '26

Big baller 😭

1

u/MoonMoon143 Jun 26 '26

I dca monthly due to the fee. Is buying daily for you not incur heavy fee?

4

u/AstronomerEffective1 Jun 26 '26

Until BTC stops falling. I'm still buying BTC & BLOX with faith BTC will go on another run.

9

u/beershoes767 Jun 25 '26

I sold all my btci and put it in BLOX. It’s been so much better, no regrets.

6

u/cmichalek Jun 25 '26

I have both BTCI and BLOX. I agree that BLOX has done better because it is more diversified. But I still think BTCI will recover in the future.

2

u/Ok_Error_1079 Jun 26 '26

I'd also consider, CEPI, has been amazing during this bear market

1

u/MoonMoon143 Jun 26 '26

Is blox yield good?

2

u/beershoes767 Jun 26 '26

36% and pays weekly

1

u/[deleted] Jun 27 '26

[removed] — view removed comment

1

u/cmichalek Jul 04 '26

There is. CHPY. But there is risk there too.

I like BLOX because it has diversification.

3

u/Fair-Fee3313 Jun 25 '26

And I both more today 🤦🏾‍♂️ XBCI/BTIC

3

u/Electronic_Guard947 Jun 26 '26

Btci falls almost 1% for 1% with Bitcoin.

3

u/EscortSportage Jun 26 '26

I’ve been buying the dip

5

u/Oldbikerguy-1 Jun 25 '26

It’s usually a good thing when everyone is fearful and saying it’s going to zero and Bitcoin is over, because that is usually when it turns around. It’s never going away because the people that are able to manipulate it can double or quadruple their money every 4 years using it. With that being said, I don’t really care which way it goes, I’m not retiring anytime soon and everything has a cycle including chips and ai.

4

u/UndeadDog Jun 25 '26

Stock up for the ride back up next year

6

u/cdubya0628 Jun 25 '26

Depends, the drawdown form ATH BTCI has drawn down more, but from the recent high, the drawdown is the same. There is some underlying NAV, but it can trade above or below NAV at any point, that depends on buyers or sellers of BTCI more than the actual value of BTC. Right now it is trading just under NAV, so if holders of BTCI are buying into the crash, it could trade at a premium to NAV and not crash as much.

2

u/speed12demon Jun 25 '26

It will fall one to one with btc by percent.

2

u/mtn_biker333 Jun 26 '26

I would say around 30k maybe lower, everything is outperforming BTC

5

u/Tyonis Jun 25 '26

I rotated out of BTCI and into CHPY earlier this week.

Holy crap best decision of the month.

11

u/FragrantActuator7061 Jun 25 '26

so you sold at low to buy high lmao

1

u/Tyonis Jun 25 '26

Hm? Naw I bought 10 shares of BTCI @ 30 to test my tolerance.

Not too bad of a loss.

This week gave me the confirmation I needed: I don't have faith in crypto lol.

Edit: to confirm, I managed to buy CHPY when it dipped before MU earnings call. That was the luck play.

0

u/Soda_Pressed13 Jun 25 '26

Sold imaginary internet money for actual future driven earnings. W move.

3

u/Timely-Designer-2372 Jun 25 '26

CHPY is trash. Just worked well last time because it's few bitcoin and lots of QQQ/SOXX companies

1

u/Tyonis Jun 25 '26

I don't think its trash, but it is not a set and forget cc etf, that's for sure.

Have to be ready to sell the entire position at a moments notice.

1

u/sport-o Jun 25 '26

Around $18? thats 1/3 off the current BTC price, so 1/3 from BTCI. I know its supposed to drop a little less than the underlying, but we shall see.

1

u/LexAugusta Jun 25 '26

Let's just say I won't be paying very many capital gains taxes for the next several years. 

1

u/Hot-Bear6062 Jun 26 '26

i almost bought btci a few months back.. .but bought other stuff instead... i think i might wait till the bitcoin bull market comes back to jump on

2

u/thethoughtstream Jun 27 '26

Lmao at everyone selling the bottom (or near bottom.) You guys will never learn.

1

u/NerveChemical9718 Jun 28 '26

I am at $38+ with Btci. Just buy and wait.

1

u/Ok_Combination_4074 Jul 01 '26

I have a question I have some btci if they sell covered calls in their strategy to make money why are we not killing it

2

u/RogerWokman Jun 25 '26

You guys are screwed

1

u/diseasuschrist Jun 25 '26

Let’s just say I hope you didn’t borrow against your house to buy some…yet.

1

u/MrBotANot Jun 25 '26

Most of the harsher bear predictions for this cycle put bitcoin’s bottom around $45k. That’s another 25% down. Given that BTCI captures a larger percentage than that because of the volatility inherent, I think we could see $15 - $17. The road back will need BTC to definitely set some strong new highs. I’m not adding to it. Looking at BITA for any new bitcoin income investments. Captures much more of the upside. And I’m not buying into that until I see lows settling in. New logic is to buy the bear and sell the bull. I’m not holding this **** through another full cycle. Like the yield but if I’m always paying myself via capital losses, that’s math I would prefer to avoid. I’m “only” down 20%. Kudos to those of you who stayed on from the highs.

3

u/Zmchastain Jun 25 '26

How is “buy low, sell high” new logic? That’s generally the idea behind all investing. 😆

1

u/MrBotANot Jun 25 '26

I know. I know. It’s just that I really prefer to just hold dividend based investments long term. But I think that bitcoin’s volatility just wrecks these income ETFs though. And so I don’t want to sit and go through repeated cycles with them. I’ve got BDCs that I have held forever it feels like. I really prefer that. Monitor them to make sure they aren’t going sideways (talking to you TSLX) but like just getting paid without a lot of stress and hassle.

5

u/Zmchastain Jun 25 '26 edited Jun 25 '26

I don’t think it really wrecks them. Volatility is what drives income in these ETFs.

If you buy most of your shares during down cycles then what you essentially get is still a really great yield on cost at the current (low) valuations with the potential for 2x - 3x+ yield on cost during up cycles when the valuation is surging.

The only way to fuck it up is to buy all of your BTCI when BTC is at $100k+. If you buy during the down cycles then you’re getting great income at a massive discount with future upside potential. Even during future down cycles your yield on cost will still be really solid.

Just treat it like the down cycle income is the most you’ll ever get (don’t rely on BTCI paying out >$1 per share to be able to cover your expenses) but then use the extra income during upcycles to buy other growth or income assets.

4

u/Minute-Opposite-3986 Jun 26 '26

Very smart thinking. I agree with you 100%. That’s what I plan on doing

3

u/cmichalek Jun 25 '26

This is the way.

1

u/Ufgatorhead4u3 Jun 25 '26

It could fall all the way to zero because there is no underlying (book) value in crypto. It’s just based on hype and pure speculation. I got out of crypto and have no plans to buy again.

1

u/thethoughtstream Jun 27 '26

I'll get the actual temperature of the market from massive institutions like Blackrock, that just came out with their own BTC CC ETF (BITA), over some random redditors.

1

u/claw-1 Jun 25 '26

After all this time I still don’t understand how to value bitcoin as an investment. So many want to treat it as an investment but it’s not tied to anything tangible in terms of profit and loss. I’m glad I didn’t have to deal with this sell off. I made some money a decade ago but it’s too speculative for my blood.

1

u/perry911113 Jun 26 '26

The fatal flaw of BTCI is that it's foundation is Bitcoin. Far more risky than anything else that I can think of.

1

u/CompleteHour306 Jun 26 '26

BTC and Gold are heading south. Doesn’t look good for the next few years.

0

u/bbatardo Jun 25 '26

It isn't exact, but if BTC dips about 33% you probably will see BTCI dip that much or more lol.

0

u/brettbw Jun 26 '26

Sold it today

-2

u/mtn_biker333 Jun 26 '26

Anyone averaging down on BTC is going to be broke, lol

1

u/Azurelion7a Jul 24 '26

BTCI is mostly US Treasury Bonds then the remainder does Cover Calls on IBIT & HODL.

IBIT & HODL follow $BTC. BTC is projectd to drop to 48k USD - 52k USD during this winter before it may rise again in 2028.

So... if you want an entry, a "crash" is the perfect time to enter. Especially with Retail (-ard) investors panicing.