One theme runs through all of it: nobody bought exposure this week. Everybody bought income.
Let’s get into it.
PS: This week, we’re testing a new format. Simpler, lighter, sharper. Tell us how you like it at the bottom of the newsletter.
Goldman Sachs agreed to acquire NEOS Investments for up to $2.25B in cash and equity, its second ETF deal this year.
What’s happening: NEOS, founded in 2022, runs $30B across 19 options-based income ETFs. The one everyone’s watching is BTCI, its bitcoin high-income fund: $1B+ in assets, under 4% of the deal, and an advertised annualized distribution rate around 27%.
When the price stops paying, investors want the asset to.
Why it matters: Goldman filed its own bitcoin premium income ETF in April. It never launched. Four months later, it agreed to pay up to $2.25B for the firm that got there first.
In ETFs, track record and assets compound. Buying two years of head start beats building. BlackRock’s rival bitcoin income fund launched in June and holds $59M. BTCI holds $1B+. It’s rare to watch BlackRock lose a category, and Goldman is paying to keep it that way.
Between the lines: BTCI’s payout comes from selling options against bitcoin’s price, and part of each distribution can be your own capital coming back. The advertised rate is ~27%; the one-year total return was about minus 42%.
