Bitcoin‘s price has been a roller coaster ride for investors for 15 years, but a new batch of Bitcoin ETFs will seek to replace the asset’s stomach-churning free falls with relatively modest declines—or none at all.
Calamos’ first “Protected Bitcoin ETF” Investors will receive 100% protection in the event of a Bitcoin price drop, with limited upside potential.
Matt Kaufman is the Calamos head of ETFs. He told me that Bitcoin’s risk profile deters a significant number of participants in the market who are concerned about its steep drop-offs. Decrypt.
“Calamos has built Bitcoin exposure with a safety net, and you can choose how low that safety net goes,” “He said” “Bitcoin is a historically extremely volatile asset, and so a lot of people have been on the sidelines watching this experiment turn into an institutional reality.”
Calamos will list its ETFs on Cboe. Its 100% Protected Bitcoin is set to launch at a $25 price Wednesday. At the end of each day, the product will announce its so-called “cap range”, which is expected to vary between 10% and 11.5%. After that, the ETF will offer 100% downside protection to Bitcoin, and a new cap range will be struck next year.
Last year, Spot Bitcoin exchange-traded funds (ETFs) were launched in the U.S. They attracted $36.2 billion in net flows from investors and traders. Flocked Wall Street firms like Fidelity, BlackRock and others are offering products that can be compared to Bitcoin. Bitcoins’ price has grown 133% in the past year, from 46,000 dollars to over $107,000But Some analysts claim It is still a slow process for registered investment advisers and wirehouses to accept such products.
Among institutional investors, 48% of those surveyed in 2023 said that digital assets’ price volatility was a considerable obstacle from an investment standpoint—citing that factor more than anything else, according to a Fidelity Digital Assets Reportage. Likewise, 22% pointed out self-custody Concerns, where spot ETFs have been largely used.
In two weeks, Calamos—which was founded in 1977—will launch additional ETFs with 80% and 90% downside protection against Bitcoin. These products are expected to have a cap of between 28% and 31%, or 50% to 55%.
Calamos says that the risk management will be done by using a combination U.S. Treasuries with flex options for CBOE Bitcoin Index US ETF. You can find out more about this website at. Kaufman says that flex options are customizable options listed on an exchange, and they can be set to have a 12-month outcome, instead of expiring the final Friday each month.
Calamos, which has $40 billion in assets under management, launched similar products covering the S&P 500 and Nasdaq-100 last year.
Kaufman said that although the products would be useful to professional investors, they could also appeal to those who are older than the average cryptobro.
“The adoption for Bitcoin has been on the individual or retail level, and it's largely been people younger than myself,” Kaufman is 45 and said. “We haven't seen too much of the adoption curve from those older investors, largely because of the risk tolerance that they just can't take.”
Andrew Hayward is the editor