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Bitcoin ETFs Provide a 34% Return Potential but Come With 52% Risk of Decline

Bitcoin ETFs Provide a 34% Return Potential but Come With 52% Risk of Decline

Bitget-RWA2025/09/26 14:11
By:Coin World

- Simplify’s MAXI ETF offers leveraged Bitcoin exposure via derivatives, using options overlays to generate income while adjusting exposure between 50-200% of net assets. - The fund achieved 86.57% one-year returns and a 34.65% dividend yield but faces risks like 52.48% max drawdowns and a 6.10% expense ratio from leverage and derivatives. - MAXI reflects Bitcoin’s shift from safe-haven to speculative income tool, aligning with $131B in Bitcoin ETF assets as providers innovate leveraged strategies amid reg

Bitcoin ETFs Provide a 34% Return Potential but Come With 52% Risk of Decline image 0

Simplify’s MAXI ETF has launched a flexible

allocation approach as the digital asset transitions from being seen as a safe store of value to a tool for generating returns. The Simplify Bitcoin Strategy PLUS Income ETF (MAXI) aims for capital appreciation by actively managing its portfolio, blending Bitcoin exposure with a risk-controlled options overlay to produce income MAXI Simplify Bitcoin Strategy PLUS Income ETF [ 1 ]. The fund’s Bitcoin allocation can vary from 50% to 200% of its net assets, guided by a proprietary technical model MAXI Simplify Bitcoin Strategy PLUS Income ETF [ 1 ]. Instead of directly holding Bitcoin, the fund gains exposure through derivatives, including futures, options, and swaps MAXI Simplify Bitcoin Strategy PLUS Income ETF [ 1 ]. This method reflects a broader market trend, where Bitcoin’s volatility and speculative nature are increasingly used to generate income rather than simply hedge against economic uncertainty Simplify Bitcoin Strategy PLUS Inc ETF [ 2 ].

MAXI’s results demonstrate its competitiveness among Bitcoin ETFs. According to the latest figures, the fund posted a 42.65% return so far this year and an 86.57% return over the past twelve months Simplify Bitcoin Strategy PLUS Inc ETF [ 2 ]. Its dividend yield stands at 34.65%, fueled by income from options, surpassing many conventional fixed-income products Simplify Bitcoin Strategy PLUS Income ETF [ 3 ]. The ETF’s expense ratio is 6.10%, which is considerably above the industry average, mainly due to interest expenses from leverage and the complexity of its derivative strategies Simplify Bitcoin Strategy PLUS Income ETF [ 3 ]. While the high yield is attractive, the fund’s Sharpe ratio of 1.17 and a maximum drawdown of -52.48% highlight the risks associated with its leveraged, multi-faceted strategy Simplify Bitcoin Strategy PLUS Income ETF [ 3 ].

MAXI’s debut in January 2024 coincided with a wave of innovation in Bitcoin ETFs, as issuers aim to benefit from the asset’s increasing institutional uptake. The ETF’s structure is similar to other covered-call strategies, like the Roundhill Bitcoin Covered Call Strategy ETF (YBTC), which also uses synthetic long positions and options to generate income These Three Bitcoin ETFs Pack On The Assets [ 4 ]. These products attract investors looking for yield in a low-rate environment, with Bitcoin’s price swings allowing for frequent adjustment of options strategies. By June 2025, Bitcoin ETFs together managed $131 billion in assets, while MAXI’s $55.3 million in assets under management signals its specialized but expanding presence in the sector These Three Bitcoin ETFs Pack On The Assets [ 4 ].

Nevertheless, MAXI’s approach involves considerable risk. The combination of Bitcoin’s price volatility and leverage can magnify both profits and losses. The fund’s reliance on futures and options adds layers of complexity, such as potential mismatches between derivative positions and the underlying asset, liquidity challenges, and counterparty risks MAXI Simplify Bitcoin Strategy PLUS Income ETF [ 1 ]. Furthermore, ongoing regulatory developments in the cryptocurrency sector, especially in the U.S., could affect both Bitcoin’s accessibility and the use of derivatives MAXI Simplify Bitcoin Strategy PLUS Income ETF [ 1 ]. Investors should also be aware of the fund’s elevated expense ratio, which includes 5.24% in interest charges from leverage MAXI Simplify Bitcoin Strategy PLUS Income ETF [ 1 ].

The evolution of Bitcoin from a defensive asset to one focused on returns reflects a broader change in investor attitudes. While Bitcoin was once primarily considered a hedge against inflation and geopolitical risks, its inclusion in mainstream portfolios—enabled by ETFs like MAXI—shows a growing recognition of its speculative opportunities. This is evident in MAXI’s design, which emphasizes income generation through options rather than capital protection Simplify Bitcoin Strategy PLUS Inc ETF [ 2 ]. As Bitcoin’s market size and liquidity continue to grow, such strategies may become more common, further narrowing the gap between digital assets and traditional investments.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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