Everyone appreciates Bitcoin-exposed income. But many are going about it the wrong way.
One product gaining popularity is MSTY, the MicroStrategy Option Income ETF. On the surface, it sounds appealing — monthly dividends “linked” to Bitcoin’s price action. But, as we’ll break down today, MSTY actively sells Bitcoin upside. Many retail investors have FOMO’d into this product without understanding that risk.
In today’s newsletter we’ll unpack how MSTY actually works, why it could leave you sidelined during the biggest bull market in Bitcoin history, and how Bitcoin mining offers a smarter, truly BTC-denominated path to income and capital appreciation.
MSTY generates “dividends” / income by selling calls on Strategy ($MSTR). The premiums generated from selling the options are distributed as dividends. However, they are selling the volatility and the upside. Over time, this leads to a significant underperformance relative to BTC (orange/white) and MSTR (blue/pink).
With BTC on the verge of breaking through to uncharted highs, now is probably not the best time to be selling away the upside.
Many mistakenly believe that $MSTY is executing a ‘covered call’ Strategy – but that’s not the case. $MSTY does not hold shares of $MSTR. They hedge their short exposure with a few ITM & OTM call options. However, they are still short ~12.9 million shares of $MSTR. The table below shows the fund holdings as of 6/9/2025.
Bitcoin Mining is similar to $MSTY in that it produces cashflow. However, the big distinction is that with mining that cashflow is BTC-denominated, and it retains net long-exposure to BTC. So when the price of BTC increases, the cashflow earned by miners increases (and sometimes the price of the mining hardware increases too). Unlike $MSTY, which forgoes most of BTC’s upside in exchange for income today.
The table below shows the year-to-date cash flows for $100,000 worth of BTC mining hardware (Antminer S21 XP’s mining at $0.078/kWh). Year-to-date a $100k deployment into miners has already cash-flowed 0.137 BTC.
The table below shows the monthly cashflows of this theoretical mining fleet based on the current BTC price & hashrate (left most column) compared to if/when the BTC price increases. If BTC hits $150,000, this mining fleet will generate ~$3,600 in monthly income. As the Bitcoin price increases, income from mining increases.
The chart below shows the BTC-breakeven price / cost of production for 4 different models of Bitcoin mining hardware. Right now, an Antminer S21 XP mines 1 BTC for ~$50,000 in electricity.
To learn how you can use Bitcoin mining to generate BTC-denominated cashflow, sign up for a free 30-minute consultation with a Bitcoin mining professional. Blockware’s team will provide you with a customized mining strategy to help you achieve your financial goals.
Sign up here: mining.blockwaresolutions.com/consult
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All content is for informational purposes only. This Blockware Intelligence Newsletter is of general nature and does not consider or address any individual circumstances and is not investment advice, nor should it be construed in any way as tax, accounting, legal, business, financial or regulatory advice. You should seek independent legal and financial advice, including advice as to tax consequences, before making any investment decision.