Bitwise is liquidating six crypto option ETFs that offered 25% payouts while returning investors’ own capital

A notable development has hit the crypto markets. Friday, July 31, was the final trading day for six Bitwise option-income ETFs. Shareholders still holding shares as of Aug. 3 face automatic cash redemption rather than an exchange sale.

The Bitwise Funds Trust board voted June 30 to liquidate ICOI, IMRA, IMST, IGME, ICRC, and IETH, according to an SEC prospectus supplement. The products use option-income strategies tied to Coinbase, Marathon Digital, Strategy, GameStop, Circle, and Ethereum. The funds were set to stop accepting creation and redemption orders after the July 31 close.

Market Dynamics

Bitwise's corrected timetable puts the final net asset value calculation on Aug. 7 and expects proceeds to reach investors through brokers or other financial intermediaries on or around Aug. Related Reading Bitwise unveils 3 new ETFs to capitalize on crypto volatility for monthly income Bitwise's new ETFs utilize covered calls on crypto-linked stocks to transform market volatility into monthly income.

Apr 3, 2025 Oluwapelumi Adejumo That sequence means holders are not choosing an execution price once trading stops. Shares still held as of Aug. 3 are slated to be redeemed for cash at the fund's NAV.

The SEC filing says shareholders generally recognize a capital gain or loss, and a fund may or may not make one or more distributions before or with the redemption payment. What the April payouts contained Bitwise reported annualized distribution rates alongside standardized yields. Bitwise Asset Management's April 23 payout estimate put the rates between 11.

Market Impact

93% for IMST, while every fund's 30-day SEC yield was 0%. The measures answer different questions. Bitwise calculates the distribution rate by annualizing the latest monthly payment and dividing it by recent NAV; it explicitly says that figure is not total return.

The 30-day SEC yield measures annualized dividends and interest after expenses. Return of capital is Bitwise's estimate of the portion representing an investor's original investment. The issuer says distributions can reduce NAV and trading price, while the classification is not proof that a payout was fictitious.

Related Reading Bitcoin is being packaged for income investors, but the yield comes with a trade-off From DeFi vaults to BlackRock’s new income ETF and Metaplanet’s Japan push, finance is turning Bitcoin into a yield product, even though the yield still has to come from somewhere else. Jun 16, 2026 Gino Matos Bitwise estimated that the April payouts for ICOI, IMRA, IMST, ICRC, and IETH were 100% return of capital, while IGME was estimated at 0%. Those were dated estimates, not final tax characterizations.

Crypto markets are watching this development closely as investors weigh its potential impact on prices.