How Does a Covered Call Lower the Effective Cost Basis of the Underlying Crypto?

Selling a Covered Call lowers the effective cost basis of the underlying cryptocurrency because the premium received from the sale of the option is immediately collected by the investor. This cash inflow directly reduces the net amount the investor has spent on acquiring the asset.

For example, if a crypto was bought at $100 and a premium of $5 is received, the effective cost basis drops to $95, providing a small buffer against a price decline.