Bitwise Ethereum ETF Declares $0.2014 Dividend, Yield Hits 4.6%

Bitwise Asset Management announced a monthly dividend of $0.2014 per share for its Bitwise Ethereum Option Income Strategy ETF (TICKER) on May 25, 2026. The declaration establishes an annualized distribution yield of approximately 4.6% based on the fund's recent net asset value. This payout arrives as Ethereum trades at $2,111.39, experiencing mild pressure with a 24-hour decline of 0.29%. The move provides a tangible return metric for investors evaluating the nascent category of cryptocurrency-based income strategies, which aim to generate yield from covered call options on the underlying asset.

Context — [why this matters now]

The dividend declaration follows a period of consolidation for Ethereum and the broader digital asset market. A primary catalyst for the fund's income generation is the implied volatility of Ethereum, which has remained elevated compared to traditional assets despite subdued spot price action. This environment creates richer premiums for the sale of call options, the fund's core income-generating mechanism.

Institutional adoption of Ethereum-based financial products has accelerated since the approval of spot Ethereum ETFs in the United States in late 2024. The Bitwise fund, launched in early 2025, represents a second-wave product designed to cater to income-focused portfolios that have historically allocated to dividend equities or real estate investment trusts (REITs). This dividend represents one of the first significant, regular cash distributions tied directly to a crypto asset's derivatives market.

The current macro backdrop of potential Federal Reserve rate cuts has increased investor appetite for alternative sources of yield. While traditional fixed income yields have retreated from their peaks, strategies like the one employed by Bitwise offer a non-correlated income stream. The fund's performance is directly tied to the health of the Ethereum decentralized finance (DeFi) ecosystem and the trading volume on derivatives exchanges.

Data — [what the numbers show]

The declared dividend of $0.2014 per share is the fund's second consecutive monthly payout, following a $0.18 distribution in April 2026. At the current share price, this translates to an annualized yield of 4.6%. This yield significantly outpaces the current SEC yield of the iShares 20+ Year Treasury Bond ETF (TLT), which stands near 3.8%, highlighting the product's appeal in a search for income.

Ethereum's market metrics provide context for the strategy's feasibility. The asset's 24-hour trading volume is $11.53 billion, indicating sufficient liquidity for the fund's option-writing activities. Ethereum's total market capitalization is $254.91 billion, establishing it as the dominant smart contract platform by value. The fund's strategy typically sells call options at strike prices 10-20% above the current spot price, capping upside participation in exchange for immediate premium income.

Metric	Bitwise ETH Option Income ETF	SPDR S&P 500 ETF Trust (SPY)
Approx. Annual Yield	4.6%	1.4%
Primary Asset	Ethereum	S&P 500 Equities
Risk/Return Profile	Capped Upside, Volatility-Derived Income	Equity Market Total Return

The fund's net assets have grown steadily since inception, though it remains a fraction of the size of its Bitcoin-covered call counterpart, the Bitwise Bitcoin Strategy Optimum Roll ETF, which manages over $1.2 billion. The yield is not guaranteed and will fluctuate monthly based on option premiums collected and the fund's management fee of 0.85%.

Analysis — [what it means for markets / sectors / tickers]

The consistent dividend payment strengthens the case for cryptocurrency as an asset class capable of producing yield, potentially attracting a new cohort of retail and institutional investors. This is bearish for traditional income sectors like utilities and consumer staples, which may face competition for capital if crypto yields remain attractive. The success of such funds could drive increased trading volume on derivatives exchanges like the CME Group (CME), which lists regulated Ethereum futures and options contracts.

A key risk for the strategy is a sharp, sustained rally in Ethereum's price. In such a scenario, the call options sold by the fund would be exercised, forcing it to sell Ethereum at the capped strike price and miss out on significant capital appreciation. This trade-off between income and growth is the fundamental compromise of any covered call strategy. The fund's performance is also contingent on sustained market volatility; a prolonged period of calm would compress option premiums and reduce distributable income.

Current positioning data from futures markets shows a neutral-to-bullish sentiment among professional traders, which supports the environment for selling call options. Flow into the fund appears to be coming from both direct cryptocurrency holders looking to generate yield on stagnant holdings and traditional equity income investors diversifying their sources of return. The strategy's popularity is a direct function of the crypto volatility risk premium, the tendency for implied volatility to exceed realized volatility over time.

Outlook — [what to watch next]

The next critical catalyst for the fund and its underlying asset is the upcoming U.S. Personal Consumption Expenditures (PCE) price index report on May 30, 2026. As the Federal Reserve's preferred inflation gauge, a softer reading could reignite risk appetite and push Ethereum toward key resistance levels above $2,250, testing the fund's option strategy.

The second major event is the next dividend declaration, expected around June 25, 2026. Investors will scrutinize whether the distribution remains stable, increases, or decreases, as this will be a direct indicator of the health of the Ethereum options market and the strategy's efficacy. A decline in the dividend could signal falling volatility or more competitive pricing from other market participants.

Traders should monitor Ethereum's price action relative to its 50-day and 200-day moving averages, currently near $2,080 and $1,950, respectively. A break and hold below the 200-day moving average could indicate a longer-term bearish trend that might pressure the fund's net asset value, even if option income remains steady. The $2,300 level represents a significant resistance zone where a large volume of the fund's call options are likely written.

Frequently Asked Questions

How does the Bitwise Ethereum ETF generate income?

The fund employs a covered call strategy. It holds a portfolio of Ethereum futures contracts and sells (writes) call options against that holding. The premium collected from selling these options is the primary source of the fund's income, which is then distributed to shareholders as a dividend. This strategy generates yield but limits upside potential if Ethereum's price rises sharply above the options' strike prices.