Grayscale is promoting covered calls as a way for Bitcoin holders to earn return during a range-bound market, even when Glassnode detects early signs of a bear market bottom.
The strategy means holding Bitcoin while selling someone else the right to buy it from you at a specific price. In return, you receive a payment called a premium. This can provide additional income when the price of Bitcoin moves sideways, although your profit is limited if the price suddenly rises sharply.
This combination offers a practical playbook for investors caught between surrender and recovery.
How does the grayscale covered call strategy work?
A covered call is an options strategy where an investor holds spot Bitcoin and sells call options against that position, collecting the premiums as income.
The trade-off is simple: cushion the downside in exchange for limiting the upside during sharp spikes.
Zach Bandel, Head of Research at Grayscale, placed The case in a recent analysis about earning option income within a range. The argument is based on Bitcoin finding a floor first and then drifting sideways for several months.
Numbers help explain the appeal. Grayscale assumption is assumed Bitcoin spot near $65,000 and 40% implied volatility To make a phone call in December 2026.
Follow us on XTo get the latest news as it happens.
Under these conditions, the strategy can achieve annual returns of approximately 22% if the price remains stable. The breakeven price is about $58,500, and the position outperforms a simple contract to about $72,500.
The logic extends beyond theory. Products like Bitcoin Covered Call ETF from Grayscalealong with similar income instruments, call options to enhance returns while maintaining exposure.
In markets that are moving wildly but going nowhere, monetizing implied volatility beats waiting. However, the catch is important: a strong rally would leave those gains on the table.
Has the Bitcoin bear market finally hit bottom?
The second half of the thesis is based on on-chain data. Glassnode Cryptovizart Analyzer tracking The group of holders of one- or two-year bonds, referring to investors who bought roughly between July 2024 and July 2025.
This group bought near the peak of the cycle, when Bitcoin rose toward $107,000. In the face of persistent underperformance and unrealized losses, These buyers were seeing the red numbers taking shape.
The style carries historical weight. Bear markets rarely bottom out until this group has exhausted selling pressure, and the data now points to a potential inflection point.
The 30-day moving average of these holders’ realized losses rose to over $75 million before reversing. According to the analyst, this cooling was often the clearest early signal that the heavier distribution phase was over.
Glasnode FIt lags behind $69,000 as the decisive battleground. This level is consistent with the short-term total cost basis to shareholders and the previous record highs of 2021.
Reclaiming it would enhance the recovery, while rejecting it would extend the side path. Ironically, this second scenario is precisely where covered calls perform best.
“Bitcoin looks ready for the next leg higher. It is already above the daily moving averages and is poised for a further break higher. A clear break above $65,000 would signal this move, and after that, $80,000 in August is on the cards,” said crypto analyst Michael van de Poppe. male.
Clearly, risks are still on the table. Options strategies incur opportunity costs during strong bull periods and real losses if prices collapse below breakeven levels.
Whether or not the 2026 bear market has actually found a footing remains unclear at the moment. However, the convergence of income instruments and the softening of surrenders gives long-term holders something to play with.
Subscribe to our YouTubeA channel to watch leaders and journalists provide expert insights.
this post Grayscale highlights Bitcoin’s 22% return opportunity as early bottom signals emerge appeared first on BeInCrypto.
