One Investor Holds Course on BTCI as Bitcoin Drops 50% From October Peak

Bitcoin is down 50% from its October 2025 all-time high of $126,200, but one income-focused retail investor is continuing to dollar-cost average into the NEOS Bitcoin High Income ETF (BTCI), a covered-call fund targeting a 24-to-30% annual distribution yield. The investor now holds 729 BTCI shares across three accounts—representing 33.7% of a full Bitcoin—at an average cost basis of $40.11 per share, equivalent to roughly $87,000 per Bitcoin.

Portfolio Sits at a $6,353 Net Loss After Dividends

Spread across a taxable brokerage, a business brokerage, and a health savings account, the investor's total outlay in BTCI stands at $29,237 against a current market value of $20,491—a capital loss of $8,744. Accumulated distributions of $2,391 narrow that to a net loss of $6,353.

BTCI's historical per-share distribution has ranged from $0.76 to $1.57, and the investor estimates it will take six to twelve months of payouts to reach break-even. The investor argues the cost basis improves materially as more shares are purchased: buying the remaining roughly 1,400 shares needed to reach one full Bitcoin's worth at BTCI's current price of $28.11 would lower the blended cost basis to $32.15 per share, or approximately $71,000 per Bitcoin.

Why a Covered-Call ETF Instead of Spot Bitcoin

BTCI holds Bitcoin exposure through iShares Bitcoin Trust ETF (IBIT) and VanEck Bitcoin ETF (HODL), then writes covered calls on Bitcoin ETPs and futures to generate monthly income—the only mechanism, the investor notes, for extracting cash flow from an asset that pays no dividends. The fund carries a 0.99% management fee.

The investor draws a distinction between NAV erosion and price decline tied to the underlying asset, arguing that BTCI's drawdown tracks Bitcoin's and does not reflect structural decay in the options overlay. Since inception, BTCI's total return has tracked Bitcoin closely while showing somewhat less downside, according to data the investor cites from Seeking Alpha.

Market Context: ETF Outflows, Liquidations, and an MSTR Sale

The investor, citing commentary from Anthony Pompliano, attributes Bitcoin's sharp decline to a domino effect: record outflows from Bitcoin ETFs as capital rotates into AI and technology stocks, which have posted gains year-to-date. Geopolitical pressures have pushed oil prices higher, stoking inflation fears and delaying an anticipated Federal Reserve rate cut. That risk-off backdrop triggered approximately $2 billion in liquidations of leveraged Bitcoin positions. Strategy Inc. also made a symbolic Bitcoin sale, departing from Michael Saylor's stated never-sell posture.

Outlook Hinges on Institutional Accumulation Floor

The investor flags a historical trend of shrinking percentage drawdowns across successive Bitcoin market cycles, noting that a 70% correction from the October peak would imply a price of $37,860. Public companies collectively hold more than 1.24 million Bitcoin, and the investor expects continued institutional buying—from corporate treasuries, spot ETF operators, and sovereign wealth funds—to limit downside over time. The investor keeps BTCI at a target weight of 5% or less of total portfolio, with covered-call ETFs broadly capped at 10-to-20%.