CONY: Earn Steady Monthly Income With This High Yielder

Summary CONY offers a high yield via monthly distributions, but its price has declined, leading to underperformance versus holding COIN directly. The ETF’s distributions are classified as return of capital, offering tax deferral benefits until the fund is sold, which can appeal to long-term investors. Risks include declining distributions, potential for the fund price to approach zero, and uncertainty about sustaining high yields in the future. I rate CONY a ‘hold’—it may be suitable for income-focused investors, but COIN offers higher total return potential for growth-oriented investors. This may not be for everyone, but the YieldMax COIN Option Income Strategy ETF ( CONY ) currently pays a 175% annual yield with distributions paid monthly. This fund can be a great way to collect monthly income with such a high yield. The fund doesn’t invest directly in Coinbase ( COIN ). CONY generates income for distributions by writing (selling) call options on Coinbase. Since COIN tends to be a volatile stock, the premiums sold can be high from the elevated implied volatility of the call options. Some investors may prefer to do their own covered call strategy. However, CONY provides the convenience of having professionals manage those options regularly in exchange for a reasonable fee (expense ratio) of 1.22%. Investors of CONY buy the fund and then enjoy the high monthly distributions without much effort. The expense ratio looks reasonable considering the high annual yield that investors can derive from CONY. Understanding CONY’s Performance Stock Performance of COIN vs. CONY (Weekly Chart) Including Dividends ( TradingView ) The weekly chart above shows the performance of COIN’s stock price with a comparison to CONY’s performance, including the distribution payouts. Even with CONY’s generous monthly payouts, COIN still outperformed. The reason for this is because CONY’s price declined significantly since inception. The YieldMax ETFs tend to underperform the underlying stocks that they derive income from. So, some investors may prefer to own COIN instead of CONY. In that scenario, COIN holders could sell some shares when income is needed. I will point out that Coinbase is currently in an uptrend on the weekly chart. This is indicated with the purple RSI line (middle of the chart) above the 50 level and the blue MACD line (bottom of the chart) above the red signal line. The MACD’s green rising histogram bars also reinforce COIN’s uptrend. Defenders of CONY may point out that they are happy with a lower total return with the consistent convenience of collecting monthly income from it. Defenders of holding COIN instead of CONY may say that they prefer the higher total return, especially when CONY’s expense ratio adds to its total underperformance. The price of CONY declined over the long term since its inception. However, CONY’s high yield allows investors to receive more in distributions than what they invested into it in a relatively short period of time. At the current yield, it would take less than a year. Therefore, CONY could lose all of its value and investors could still be profitable from the high distributions. Of course, this assumes that YieldMax is consistently successful with producing strong income. CONY’s Tax Benefit Another plus for CONY is that the distributions are taxed differently than regular dividends. Since income from CONY is essentially options income, it is considered return of capital when paid out. The return of capital reduces the adjusted cost basis. According to IRS rules , return of capital is not taxed in the year that you receive the income. It would only be taxed when the ETF is sold. Therefore, a long-term holder of the fund could enjoy multiple years of income from CONY without being taxed on it if they choose not to sell. It is important to note that if the price of CONY went to zero, future distributions would be taxed in the year that you receive them. It is possible that the fund would do a reverse split if the price approached zero. This would allow the fund to continue and for YieldMax to continue paying distributions. Distribution Payout History CONY’s Distribution Payout History (Seeking Alpha) We can see from the table above that 2025 was the first year that the monthly distributions dropped below $1 per share. This is relative to the price of CONY. For example, back on December 7, 2023, the distribution of $2.4615 was a monthly yield of 10.7% based on CONY’s price on that day of $23.04. Recently, on May 29, 2025, the distribution of $0.7351 was a monthly yield of 9.5% based on CONY’s price of $7.75 on that day. While the monthly yield did drop, it didn’t drop as drastically as the percentage change of the distribution payout. Investors can purchase more shares as CONY’s price drops, which can increase their monthly returns. That can include reinvesting some of the distributions to purchase more shares. Risks for CONY I realize that it sounds cliche, but there is no guarantee that future results will be similar to the past. It is possible that YieldMax is not able to produce high distributions going forward the way they did in the past. The implied volatility of the options sold could change, which could produce different results for distribution payouts. CONY’s underlying price could continue to drop and approach zero. So, investors need to realize that the distributions are what can make them money from this ETF. YieldMax would probably do a reverse split to increase the price of CONY if it dropped too low. YieldMax did a reverse split on TSLY back in February 2024. It is also possible that the monthly distributions are lowered significantly, making the total annual yield less attractive. This could also significantly increase the amount of time that it would take for investors to make back their initial investment in distributions. Final Thoughts on CONY I see CONY fit for investors who desire steady monthly payouts. Personally, I would strive to get the highest return on my money as possible. That means that I would prefer to own COIN, which tends to have a higher total return even when CONY’s dividends are accounted for. Those who prefer COIN should keep an eye on Bitcoin’s ( BTC-USD ) bull markets. The reason for this is because COIN tends to trend similar to Bitcoin. Bitcoin’s bear markets can be brutal, and the same is true for COIN. CONY began trading in 2023. So, it hasn’t been around during Bitcoin’s last halving cycle. It is possible that CONY’s opposite, the YieldMax Short COIN Option Income Strategy ETF ( FIAT ) would be better to own after Bitcoin and COIN peak this cycle. However, there is not much history to gauge how CONY and FIAT would perform during a Bitcoin bear market. Overall, I’ll rate CONY a ‘hold’ since it can act as a feasible way for investors to collect income on a monthly basis. I won’t give it a higher rating because CONY’s success depends on the skills of the fund managers. Plus, there is not much history for this ETF since it is only a couple of years old.

Source: Seeking Alpha