Summary Nicholas Crypto Income ETF offers a unique blend of cryptocurrency, crypto miners, trading platforms, and semiconductor stocks for diversified crypto exposure. BLOX employs options strategies to extract weekly dividends, targeting income generation alongside potential capital appreciation in a volatile asset class. Despite a recent -40% drawdown, BLOX remains positive on a 6-month total return basis and is positioned for a potential short-term rebound due to oversold conditions. BLOX is best used as a high-beta tool during crypto market recoveries, but long-term performance is highly dependent on the broader crypto cycle and macro trends. Thesis The crypto space is a fairly recent one, and more importantly it is very new when it comes to traditional capital market instruments. It took a long time for crypto to become available via exchange-traded funds, and the respective universe has further expanded with the advent of ancillary businesses such as crypto miners. Capital markets waste no time, and traditional ETF providers have flooded the market with exchange-traded products that offer investors access to these segments. In today's article, we are going to talk about the Nicholas Crypto Income ETF ( BLOX ), a new addition to the exchange-traded universe. Several types of crypto exposure We are going to start by offering investors a quick overview of what is present in the market regarding crypto: 1. Outright exposure to a cryptocurrency via an ETF Cryptocurrencies (Author) We have summarized them by cryptocurrency, the holdings (spot or futures) and also provided readers with the tickers for the leveraged 2x ETFs for each name. We have covered in the past IBIT, BITO, and ETHT on the Seeking Alpha platform. Kindly note that we are not making any judgements regarding the asset class or crypto in general but merely listing the largest regulated funds in the space and their leveraged equivalents. 2. Bitcoin miners and infrastructure ETFs The second category has to do with ETFs which aggregate bitcoin miners, infrastructure providers and crypto trading platforms. In this category we can find funds like the Bitwise Crypto Industry Innovators ETF ( BITQ ) or the VanEck Digital Transformation ETF ( DAPP ). These names target exchange-listed equities that are part of the crypto ecosystem but do not contain cryptocurrencies outright. 3. A blend of cryptocurrencies and bitcoin miners/infrastructure companies BLOX falls in the third category and represents a portfolio that is a blend of outright cryptocurrencies and miners/infrastructure companies. What does the fund do and what does the fund hold? As stated above, BLOX blends outright cryptocurrencies with companies that operate in the larger crypto ecosystem: Holdings (Fund Website) The fund holds roughly 30% in bitcoin via the VanEck Bitcoin ETF ( HODL ) and the Fidelity Wise Origin Bitcoin Fund ETF ( FBTC ), and another 10% in ether via the iShares Ethereum Trust ETF ( ETHA ). So that is a rough 40% outright holding in cryptocurrencies. Crypto miners represent approximately 30% of the holdings via names such as MARA Holdings, Inc. ( MARA ) and Galaxy Digital Inc. ( GLXY ). Trading platforms represent another 15% via names such as Coinbase Global, Inc. ( COIN ) and Robinhood Markets, Inc. ( HOOD ), while semiconductor stocks are another 10%. The residual is held in cash. So as a summary, we have the following segmentation: Cryptocurrencies: 40%. Miners: 30%. Trading platforms: 15%. Semiconductor stocks 10%. What is very particular about this ETF though is the fact that it does not simply hold equities outright but also aims to extract dividends via options strategies: The fund seeks to generate income primarily using options contracts on some or all of the individual holdings of the equity and crypto portfolio. BLOX portfolio managers will select options strategies that it believes will best provide the Fund with current income while also attempting to capture upside appreciation. BLOX has the additional feature of offering dividends paid weekly out of its holdings. This is not a bad strategy for a very pro-cyclical and volatile asset class. We are not going to go through the options structures because they represent complex ways of doing a very simple thing—extracting dividends from a portfolio of equities. The fund's current distribution rate is 36%, but like any fund that employs such a strategy, the distribution rate is meaningless in isolation, and what we should look at is total return. Performance so far The fund is fairly new, having come to market in June 2025. We shall now compare it with a number of the above-mentioned ETFs: Data by YCharts Although BLOX is down an astounding -40% since early October 2025, the fund is still positive on a 6-month basis when using a total return measurement tool. Please note the close correlation with BITQ as per the graph above. BLOX is a great tool to use when looking for a very high-beta crypto industry investment that will also extract dividends for you from the underlying holdings. We find this name to be a good building block to use at the beginning or during the intermediate phases of a recovery. An investor here does not have to choose an exit point, with the fund constantly harvesting gains. Potential for a rebound The crypto ecosystem has been in a massive downturn in the past month, with eye-popping drops: Data by YCharts In the past month, we have seen drops in the mid-20s percentage-wise for crypto-related names, with some outliers like MARA down -43%. BLOX is in the middle of the cohort with a -22% move (again, we are using a total return calculation here). While the long-term performance for the fund is dependent on where we are in the crypto cycle, in the short term, the market is oversold when looking at RSI levels and sentiment: Technical Picture (Seeking Alpha) The RSI for the ETF is currently 28, sub the 30 threshold for oversold conditions: An RSI below 30 is considered an oversold condition, which suggests a potential buy signal. This indicates the asset may be undervalued and due for a rebound. Oversold markets tend to bounce, even if for short periods of time. On a longer time frame (12 months or more), an investor needs to make an educated decision if we are in the middle of a crypto cycle or towards the end. On a shorter time frame, though, we can also see the name touching the lower end of its Bollinger Band, which again, in many instances, is the sign of a short-term relief rally to correct oversold conditions. Nothing goes lower in a straight line in finance, and extreme technical levels like today's need to mend via either a stabilization or relief rally before another potential leg down. We like BLOX for what it tries to do, and we find it to be an apt tool to speculate on the crypto boom during a recovery phase, but it is unclear where we stand with the crypto macro currently. We are looking for a shorter-term bounce here in BLOX because of oversold conditions, but long-term prospects are macro-dependent. Conclusion BLOX is a new exchange-traded fund. The name blends outright cryptocurrency holdings with crypto miners and trading platforms. The ETF further structures its portfolio with options in order to constantly extract dividends from the portfolio. We like BLOX as a tool during a market recovery, but its performance is very much dependent on the macro crypto cycle. Yes, an RSI below 30 is considered an oversold condition, which suggests a potential buy signal. This indicates the asset may be undervalued and due for a rebound, but it's crucial to use this as a starting point and not as a sole indicator for making investment decisions.
