Until fund sponsors developed ETFs that pay big dividends, I viewed cryptocurrencies as products without any practical use. But now, with the advent of covered call ETFs that use Bitcoin as the underlying asset, I have become a Bitcoin fan.A recent Wall Street Journal article discussed why the limited supply is fueling the Bitcoin rally. The article went into significant detail, but I want to pull out a few interesting data points.Many of you know that Bitcoin is mined using high-powered computers. The cryptocurrency was designed so that no more than 21 million coins could be mined. To date, 19.8 million have been mined, leaving just 1.2 million to go. The article noted that the ability to mine additional Bitcoin will be nonexistent around 2040.This chart shows the ownership breakdown of all Bitcoin:
Note that individuals hold 70% of Bitcoin, most of whom will be of the HODL (hold on for dear life) mindset. Also, ETFs hold just 5.9%, but the number of Bitcoins in ETF portfolios has doubled since the end of 2022. Businesses, governments, and ETFs are all looking to buy Bitcoin from a base of just 11.4% of the total number of coins.Since the end of 2020, these three groups’ Bitcoin holdings have grown by 500%. The coins they chase come from a small portion of the total number of Bitcoins. Demand will continue to push Bitcoin prices higher.My ETF Income Edge service researches and recommends ETFs that use options strategies to boost returns, especially dividend yields. The Roundhill Bitcoin Covered Call Strategy ETF (YBTC) has been a favorite, with a current distribution yield of 40.75% and a trailing one-year total return of 63%. There are several other across my various ETF investing services. More By This Author:Will These Target Yield ETFs Redefine Income Investing?Is This Energy Stock Yielding 20% Doomed?The Race For 20% Yields: Can These New ETFs Lead The Pack?
