Bitcoin News Today: Calamos Files Bitcoin ETF with 20% Downside Protection

Calamos Investments, a prominent investment firm with over $40 billion in assets under management, has filed for a new Bitcoin (BTC) exchange-traded fund (ETF) in the United States. This ETF will employ a "laddered" options strategy, which is designed to provide investors with a more diversified and potentially less volatile exposure to Bitcoin. The strategy will be tied to five major Bitcoin funds, including the iShares Bitcoin Trust, the Bitcoin Mini Trust, the Bitwise Bitcoin ETF, the Fidelity Wise Origin Bitcoin Fund, and the ARK 21Shares Bitcoin ETF.

Options are investment instruments that give the holder the right but not the obligation to buy or sell an underlying asset before or on a certain date. They are commonly used to mitigate risk and protect against potential losses. The new ETF will invest in options contracts that reference the performance of these five funds, aiming to offer investors a way to gain exposure to Bitcoin while potentially mitigating some of the risks associated with direct investment in the cryptocurrency.

This new ETF is part of a growing trend of financial products that seek to provide investors with exposure to Bitcoin in a more managed and diversified manner. By using a laddered options strategy, the ETF aims to provide a smoother return profile compared to direct investment in Bitcoin. This strategy involves buying and selling options contracts at different strike prices and expiration dates, which can help to manage risk and volatility.

The five major Bitcoin funds that the ETF will be tied to are well-established and have a significant presence in the market. This provides a level of stability and credibility to the ETF, as it is backed by funds that have a proven track record. The iShares Bitcoin Trust, for example, is one of the largest and most well-known Bitcoin funds in the market. By referencing the performance of these funds, the ETF aims to provide investors with a diversified exposure to Bitcoin.

The new ETF is expected to appeal to a wide range of investors, including those who are new to Bitcoin and those who are looking for a more managed and diversified way to gain exposure to the cryptocurrency. The ETF's use of a laddered options strategy is a unique approach that sets it apart from other Bitcoin ETFs in the market. This strategy is designed to provide investors with a smoother return profile, while still offering the potential for significant gains if the price of Bitcoin continues to rise.

The filing of the new ETF by Calamos Investments is a significant development in the Bitcoin market. It demonstrates the growing interest in Bitcoin as an investment asset and the increasing demand for financial products that provide exposure to the cryptocurrency. The ETF's use of a laddered options strategy is an innovative approach that could appeal to a wide range of investors, and its backing by well-established Bitcoin funds provides a level of stability and credibility to the product.

Calamos' new ETF aims to target downside protection for losses greater than 20%. Aside from options, the fund can invest in cash and US Treasurys, depending on the portfolio management approach used. The document states, “If, for example, the Floor is 20% and the price of Spot bitcoin declines by 8% over a Target Outcome Period, an investor in the Underlying Fund would not receive any protection from the Floor because the decline was not greater than 20%. If, by contrast, the decline of the price of Spot bitcoin over the Outcome Period was 32%, the Floor feature is designed to limit that investor's loss to only 20%."

In January, Calamos launched three “protected” Bitcoin ETFs that have varying degrees of upside potential and downside protection. This new ETF builds on that strategy, offering investors a more sophisticated approach to managing risk in the volatile cryptocurrency market. The ETF's laddered options strategy is designed to provide a buffer against significant price declines, making it an attractive option for risk-averse investors.