Bitcoin income funds: yield, return of capital, and taxes
Bitcoin income funds. Covered-call funds like BTCI: how the distributions actually work, NAV erosion, return of capital. Mechanics, not picks. Part of each monthly payment is often not income at all. This pillar covers how the funds generate the cash, what return of capital does to your basis, and how the tax character shows up on the form in February rather than on the fund page.
Calculator
ETF Income Calculator
The estimate on the notice is not the character on the 1099. A position goes through the arithmetic with a return-of-capital range, not a guess.
Guides
NAV erosion in covered-call ETFs, from audited numbersWhat NAV erosion is in a covered-call bitcoin ETF, why a distribution lowers NAV by the same amount, and the audited NAV-per-share series for four funds.2026-09-02Return of capital tax: basis, box 3, and Form 8937How a return of capital distribution is taxed: the three tiers of section 301, why it is a year-end residual, the Publication 550 example, and box 3.2026-09-02MSTY distributions: payout and return of capitalWhat MSTY pays each week, how the fund generates it, why the return-of-capital estimate is not the tax character, and what the audited numbers show.2026-09-02BTCI distributions: the notice and Form 8937What BTCI pays each month, how the fund generates it, what the 19a-1 notice estimates, what Form 8937 finalized for 2025, and the conflict in its reports.2026-09-02YBTC distributions: notice, audited number, basisWhat YBTC pays each week, how the fund generates it, what the 19a-1 notice estimates, what the audited 2024 and 2025 statements report, and basis.2026-09-02YBIT distributions: return of capital and the splitWhat YBIT pays each week, how the fund generates it, what the audited statements report as return of capital, and what the reverse split did to basis.2026-09-02
Latest from the blog
All posts2026-09-04BTCI ETF: the notice said 96%, the 8937 said 44%A field note on one BTCI payment and its two documents: the Rule 19a-1 notice that estimated 96% return of capital and the Form 8937 that finalized 44.462767%.2026-09-04Fidelity crypto IRA: what the page saysA field note on the Fidelity Crypto IRA page as fetched 2026-09-04: three account types, four assets, the fee line, the custody language, what it leaves out.2026-09-04MSTY dividend yield: two numbers, one pageA field note on the two yields MSTY prints on its own page, a distribution rate near 100% and a 30-day SEC yield under 2%: what each one measures and why.