Coinbase ETF Strategy Comparison: Why Covered Calls May Not Be the Best Choice

Coinbase Income ETF Comparison

Leveraged income ETFs like Roundhill COIN WeeklyPay ETF (COIW) are generally favored over covered-call strategies (YieldMax COIN Option Income Strategy ETF - CONY), especially given a bullish outlook for Bitcoin and Coinbase. COIW's active leverage management balances risk and reward better than CONY, which struggles in flat or volatile markets and offers limited protection against drawdowns while failing to fully capture upside potential.

Coinbase & Underlying Thesis

Coinbase’s strategic acquisitions, payments integrations, and crypto ETF inflows support its long-term growth potential, warranting a cautiously bullish outlook. A bullish Coinbase thesis is essential for leveraged strategies like COIW to perform well. While volatility remains a factor, Coinbase's growth and maturation align with Bitcoin's overall bullish trajectory.

Performance and Recommendations

CONY underperforms in flat markets and consistently loses out on upside rallies, even when Coinbase remains relatively stable. Given this, and considering that COIW actively manages leverage and offers a more conservative yield, a Hold rating for COIW is recommended. The assessment leads to a downgrade of CONY from Hold to Sell due to its lack of meaningful benefits.

Leverage and Yield Considerations

While COIW’s leverage presents potential risks, active management mitigates them. Its yield, while aggressive, is lower than CONY’s, improving the chances of maintaining NAV. For investors with a bullish Coinbase outlook, COIW remains a more balanced and preferred option over CONY’s high-yield, but less effective approach.