Max Out Crypto

One of the big knocks on the digital gold or crypto is that it doesn’t generate some type of annuity-like payment.

That’s right, it doesn’t.

It’s not like a rental property that pumps out dollars every month.

That honestly turns off a lot of people.

I get it.

Getting those Benjamins to fill pockets for investors is a comforting feeling.

Instead, crypto holders are rewarded by the appreciation of the asset itself.

Speculative investors must wait for the price of crypto to elevate and sometimes it doesn’t so investors can’t cash out.

For the first time in the history of crypto products, the ETF Simplify Bitcoin Strategy PLUS Income ETF (MAXI) is designed to solve that challenge.

It combines investments in the bellwether coin crypto bitcoin with derivative-based income-producing products.

The Simplify Bitcoin Strategy PLUS Income ETF (MAXI US) is listed on Nasdaq with an expense ratio of about 1.00%.

The fund’s options sleeve is actively managed and consists of opportunistically selling short-dated put or call spreads on the most liquid global equity indices.

The management of MAXI described the portion of income-generating opportunities as “padding.”

However, that doesn’t adequately describe the large risk of what they are actually doing.

They are talking about this ETF as if the “income” is almost guaranteed.

But the risk here is that selling option calls and puts can be extremely loss-making and they fail to disclose that to investors.

This type of Frankenstein investment is definitely an interesting spin on crypto products by combining a derivative portion to the speculative crypto part.

There are many moving parts to this and due diligence is necessary.

In addition to the high risk, the management fee is a big turn-off.

The fee is to basically fund the operation, but it’s no guarantee that the derivative portion of the portfolio will be successful.

They claim they will generate income by writing short-dated option spreads on the “most liquid global equity indices,” yet as of 2025 the portfolio is still dominated by exposure to the iShares Bitcoin Trust (IBIT), along with a small sleeve of listed call options and index-based spreads.

The opaqueness doesn’t sit well with me and it shouldn’t with you.

The prospectus explains that the “options overlay strategy will invest up to 20% of fund’s assets,” which remains true in current filings.

Therefore, it could either be 0 or 20% of the ETF capital exposed to complete losses because the traders bet on the wrong short-dated strategy.

Essentially, investors have no idea what they are investing in.

What if there are no “income generating” profits and they are all losses?

Surely, they must be refunded to the customers, but I highly doubt it.

Adding speculation on top of speculation usually ends up badly and that is exactly what personifies MAXI.

Buy it for the asset appreciation or avoid it, but then might as well just buy Bitcoin itself.

This ETF needs to be avoided at all costs.