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Bitcoin ETFs were a big hit with investors in 2024, and now asset management firms are starting to create ways to integrate cryptocurrencies and derivatives into exchange-traded packages.
New products are scheduled to be launched this month. Asset manager Calamos announced on Monday that it will launch the platform ETF It aims to give investors a way to capture some of Bitcoin's upside with 100% downside protection.
The fund will combine exposure to options on the Cboe Bitcoin US ETF with Treasury holdings and is designed to be held for 12 months. The exact upside cap will be determined on January 22, based on options pricing. It will trade under the symbol CBOJ.
The fund primarily offers a common stock ETF strategy for investing in cryptocurrencies. Specific outcome products, incl Buffer fundshas boomed in recent years as investors look for new ways to diversify their investment portfolios. Its increased popularity appears to have contributed to the market sell-off in 2022, when stocks and bonds fell.
Bitcoin spot funds launched in January 2024 and had arguably the best debut in the history of ETFs. The funds combined to raise tens of billions of dollars and helped fuel Bitcoin's rise to an even higher level Record higher than $100,000.
Bitcoin has risen sharply since ETFs tracking the cryptocurrency were approved last January.
It prompted inflows and a rise in cryptocurrencies iShares Bitcoin Trust ETF (IBIT)It is the most popular among funds, with total assets of more than $50 billion.
However, Matt Kaufman, head of ETFs at Calamos, said his team believes financial advisors are still largely avoiding bitcoin because of its history of volatility, and that these structured funds could win.
“For people looking to get into this space, they want to do it within a risk management framework, or something that makes more sense for their portfolio,” Kaufman said. It is also believed that investors will hold the Calamos fund alongside Bitcoin ETFs.
Kalamos isn't the only ETF manager working on how to align crypto exposure with other popular fund styles.
Innovative and First trust They are two other ETF issuers that have applied to launch funds with strategies similar to those of Calamos. Companies are also trying to combine bitcoin with income generation strategies, including covered call funds proposed by issuers such as Grayscale and Roundhill.
More money is likely to be introduced throughout 2025, especially with the Securities and Exchange Commission expected to be more crypto-friendly under the president-elect. Donald Trump.
How it works
Calamus box is designed to be kept for 12 months. The stated holding period is from January 22, 2025 to January 31, 2026. Because exposure to Bitcoin is through options, which change in price as their expiration date approaches, it is possible that investors who sell the fund early will receive less than the expected gains from Bitcoin's rise. You may suffer a loss.
Kalamos Bitcoin Alternative Security Foundation – January
| tape | Holding period | The goal of downside protection | Annual fees |
|---|---|---|---|
| Central Bank of Japan | 1/22/2025-1/31/2026 | 100% | 0.69% |
source: Reeds
Calamos also plans to launch “floor” funds that offer 90% and 80% protection for Bitcoin, allowing for some initial losses in exchange for further upside.
Kaufman said the structure of bitcoin products that operate will likely look different from traditional buffer funds, which protect against a stated first percent loss, due to volatility in cryptocurrencies.
“If you look at the returns of the S&P 500, it looks like a normal bell curve distribution. And if you look at the distribution of bitcoin returns, it looks more like a smiley,” Kaufman said. “Isolated, you're not really protecting from much of anything.”
Another thing to watch is how the options market grows along with the money. Options tied to Bitcoin ETFs only began to roll out in late 2024. Liquidity issues with options have hurt performance Leveraged funds are associated with MicroStrategywhich is often viewed as a proxy for Bitcoin.
“We have no concerns about capacity at all,” Kaufman said of the options market for Calamos funds.
