Is CONY’s 76% Yield on Coinbase a Good Way to Bet on Crypto?

There are exchange traded funds (ETFs) that offer good yield, and there are ETFs that offer amazing yield. Suffice it to say that the YieldMax COIN Option Income Strategy ETF (NYSEARCA:CONY) falls into the “amazing yield” category.

As you may have surmised, the CONY ETF is a high-yield play on Coinbase Global (NASDAQ:COIN | COIN Price Prediction) stock. The performance of cryptocurrencies that trade on Coinbase’s platform, such as Bitcoin (CRYPTO:BTC), can also affect the YieldMax COIN Option Income Strategy ETF.

When you see CONY’s gigantic annual yield, you might assume that it’s the best way to bet on Bitcoin. There are risks to take into consideration, though, so caution is warranted with the YieldMax COIN Option Income Strategy ETF.

CONY: Stellar Yield for Bitcoin Believers

There are plenty of high-yield ETFs to choose from in 2025. Yet, the YieldMax COIN Option Income Strategy ETF ranks among the highest-yielding funds available today.

Believe it or not, the CONY ETF’s distribution rate (i.e., the forward annual yield) is currently advertised as 75.74%. Even among YieldMax’s menu of high-yield ETFs, the YieldMax COIN Option Income Strategy ETF offers one of the most enticing distribution rates.

Here’s a quick summary of how the fund works. The YieldMax COIN Option Income Strategy ETF holds some U.S. Treasury bonds, which can provide collateral for the fund and will also produce some income.

It might surprise to you learn that CONY doesn’t directly hold shares of Coinbase stock. Instead, the YieldMax COIN Option Income Strategy ETF uses synthetic option strategies to mimic ownership of COIN stock shares.

Then, the fund writes (i.e., sells) covered call options to generate income. That’s how the YieldMax COIN Option Income Strategy ETF achieves its eye-catching distribution rate. To sweeten the deal even further, the CONY ETF pays out its cash distributions each and every month.

Bitcoin and Coinbase stock don’t pay any dividends at all. So, passive income seekers who are also Bitcoin believers may be tempted by the YieldMax COIN Option Income Strategy ETF’s huge annual yield.

Warnings About CONY

Before you dive headfirst into the YieldMax COIN Option Income Strategy ETF, it’s important to consider some warnings about this fund. To begin with, the CONY ETF automatically deducts 1.22% in operating expenses per year from the share price.

Furthermore, if there’s a rally in Bitcoin and/or Coinbase stock, the YieldMax COIN Option Income Strategy ETF might not move up as much as you would expect it to. CONY uses covered call writing strategies which produce passive income but also limit the fund’s share-price upside when COIN stock rallies.

We can find a perfect example in the share-price action of 2025 so far. Bitcoin has rallied this year, and so has Coinbase stock.

In contrast, CONY stock is down on a year-to-date basis. This is undoubtedly a disappointing outcome for investors of the YieldMax COIN Option Income Strategy ETF. Clearly, the fund’s covered call strategies have advantages (high distribution rate) and disadvantages (limited share-price upside potential).

Besides, if Bitcoin and COIN stock enter into a prolonged bear market, CONY’s 75.74% distribution rate could be at risk. It would be a major letdown, no doubt, if the fund’s share price declines and its annual yield gets cut.

The takeaway is that the YieldMax COIN Option Income Strategy ETF didn’t perform well even when Bitcoin and COIN stock rallied. The fund’s big monthly distributions might have made up for the share-price lag, but there’s no denying that CONY involves serious risks.

How to Invest Safely in CONY

Despite the critical warnings, it’s still possible to invest safely in the YieldMax COIN Option Income Strategy ETF. The first guideline is to only purchase a small number of CONY shares.

Another way to de-risk your investment in the YieldMax COIN Option Income Strategy ETF is to constantly monitor the fund’s share price and distribution rate. If the CONY stock price falls too quickly, be ready to exit your position. Moreover, you can sell your shares if the distribution rate gets severely cut.

Finally, you don’t have to reinvest the cash distributions from the YieldMax COIN Option Income Strategy ETF. It’s perfectly acceptable to just keep the cash.

Alternatively, you can invest the monthly CONY cash payouts into more stable and diversified ETFs, such as the Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD) and the Vanguard High Dividend Yield ETF (NYSEARCA:VYM). That way, you can derive income from a variety of sources and thereby mitigate some of the risks associated with the YieldMax COIN Option Income Strategy ETF.