CONY Shareholders Lost 56.25% While Paying Tax on Their Own Money Back
CONY Shareholders Lost 56.25% While Paying Tax on Their Own Money Back
Michael WilliamsWed, July 15, 2026 at 9:33 PM UTC
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CONY dropped 56% in the past year while distributions collapsed from $2.79 to $0.06 and quietly returned investors' own capital as taxable income.
Direct COIN shares deliver nearly identical price outcomes without fund fees, capped upside, or a synthetic option overlay that forfeits every rally.
This lithium producer surpassed a $1B private valuation, joining some of America's most powerful startups. Now you can invest in EnergyX alongside global giants like General Motors, but only through July 16. (sponsor)
The pitch is a 78% yield on a crypto-exchange proxy. The reality is that a fund charging you monthly for the privilege of capping your own upside has quietly turned a bet on Coinbase (NASDAQ:COIN) into a slow leak. YieldMax COIN Option Income Strategy ETF (NYSEARCA:CONY) shareholders got most of Coinbase's downside and almost none of the recoveries. Then they paid tax on their own principal coming back as "income."
What You're Actually Paying
CONY's expense ratio is not disclosed in the April 30, 2026 NPORT filing, an unusual gap for a fund with $397 million in net assets. That is only the sticker cost. The structural cost dwarfs it.
Look at the last twelve months. CONY fell 56.25% from July 2025 to July 2026. Coinbase itself fell 59.10% over the same window. Investors who bought CONY for "income with less risk" got almost the entire drawdown and gave away the upside on every rally in exchange. On a $10,000 position held for that year, the price value collapsed to roughly $4,375. The distributions cushioned that, but a large share of those distributions was your own capital handed back to you.
The Part the Factsheet Doesn't Highlight
CONY holds Treasury Bills at 91.60% of net assets plus a set of paired long and short call options on COIN. The matching unit counts on the long and short legs (10,940, 10,055, 5,530, 4,555, 1,000) confirm a synthetic covered call. The short calls collect premium. They also cap gains at the strike. When COIN rips higher, you keep the premium and forfeit the rally.
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Here's why you should do the same before their July 16 investment deadline: lithium prices are up 75% this year, with demand projected to grow a staggering 5X by 2040.
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Now look at the distribution history. In April 2024, CONY paid $2.7944 in a single distribution. By late November 2025 the payments had collapsed to $0.0635 and $0.0656. The 2026 schedule is a weekly drip in the $0.22 to $0.56 range. Trailing twelve-month distributions total $15.3524 on a share price of $19.46. A payout that size relative to price is a red flag for return of capital, which is not free money. It reduces your cost basis and defers a tax bill rather than eliminating it. Meanwhile the NAV bleeds visibly: shares opened 2026 at $27.92 and traded at $19.63 by July 10, a 27.02% year-to-date decline.
Options premium is also taxed less kindly than qualified dividends. For a taxable account, the ordinary-income treatment on the option-derived portion, combined with the ROC erosion of basis, is a two-sided tax drag the fund's yield headline never mentions.
The Cheaper Mirror
If the goal is Coinbase exposure, the cheaper mirror is Coinbase. Direct shares of COIN carry no fund fee, no capped upside, and no synthetic option overlay siphoning off rallies. Over the past year the price outcomes were close (CONY down 56.25% versus COIN down 59.10%), but on any strong up move CONY's short calls will hand the gains back. Investors who want crypto-linked income with lower structural cost can pair a direct COIN position with their own covered calls at strikes they choose, or use a broad, lower-cost crypto equity fund and generate income from Treasuries directly. The T-bill sleeve inside CONY is something you can already own for a few basis points.
What This Means for You
CONY clearly pays. The real question is what it pays with. If a big share of your monthly check is your own principal returning in a higher-tax wrapper, and the fund's design guarantees you miss the upside that would replace that principal, ask what you are actually renting for the fee you cannot see on the factsheet.
Meet America's Newest $1b Unicorn (Sponsor)
A US startup just passed a $1 billion private valuation, joining billion-dollar private companies like OpenAI and ByteDance. Unlike those other unicorns, you can invest in EnergyX right now; but only until July 16.
Over 50,000 people already have, along with global giants like General Motors and POSCO.
Here's why there's so much interest: EnergyX's patented tech can recover up to 3X more lithium than traditional methods. That's a big deal, as demand for lithium is expected to 5X current production levels by 2040. Become an early-stage EnergyX shareholder before the 7/16 investment deadline.
Contact editorial@247wallst.com for any questions or corrections.
Source: “AOL Money”
