New ETF combining Bitcoin exposure and options to launch in 2025

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Bitcoin ETFs are gaining popularity with investors in 2024, and now asset managers are looking for ways to combine cryptocurrencies and derivatives into exchange trading packages.

New products will be launched this month. Asset management firm Calamos announced on Monday that it will launch Structural Protection ETFs Its purpose is to provide investors with a way to capture Bitcoin’s upside while receiving 100% downside protection.

The fund will combine options exposure from the Cboe Bitcoin U.S. ETF Index with U.S. Treasury holdings and is designed to be held for 12 months. The exact upper limit will be determined on January 22 based on option pricing. It will trade under the ticker CBOJ.

The fund essentially brings the popular stock ETF strategy to cryptocurrency investing. clear outcome products, including buffer fundsInvestment portfolios have boomed in recent years as investors look for new ways to diversify their portfolios. Their increased popularity appears to have been aided by a market sell-off in 2022 that saw both stocks and bonds fall.

The Spot Bitcoin Fund launched in January 2024 and had arguably the best debut in ETF history. Combined, the funds raised tens of billions of dollars and helped fuel Bitcoin’s rise Hits all-time high, breaks $100,000.

Bitcoin has surged since an ETF tracking the cryptocurrency was approved last January.

Fund inflows and cryptocurrency rally fuel iShares Bitcoin Trust ETF (IBIT)It is the most popular fund with total assets exceeding $50 billion.

However, Matt Kaufman, director of ETFs at Calamos, said his team believes financial advisors still largely shy away from Bitcoin due to its history of volatility, and that these structured funds could win them over support.

“For those looking to get into this space, they want to do it within a risk management framework or within a framework that makes more sense for their portfolio,” Kaufman said. He also thinks investors will hold Calamos Fund and Pure Bitcoin ETF.

Calamos isn’t the only ETF manager working on how to combine cryptocurrency investing with other popular fund types.

innovator and first trust Two other ETF issuers have also applied to launch funds with strategies similar to Calamos. The company is also trying to combine Bitcoin with revenue-generating strategies, including a proposed covered redemption fund from the issuer Grayscale and round hill.

More filings are likely in 2025, especially with the SEC, which is expected to be more crypto-friendly under the president-elect Donald Trump.

how it works

Calamos funds are designed to last for 12 months. The prescribed holding period is from January 22, 2025 to January 31, 2026. Because Bitcoin exposure is built through options, which can change prices as expiration approaches, investors who sell the fund early may reap gains. Lower than the expected gains from Bitcoin’s rise, you may even suffer losses.

Calamos Bitcoin Structured Alternative Protection ETF – January

stock ticker	Holding period	Downside protection target	annual fee
Bank of Japan	January 22, 2025 – January 31, 2026	100%	0.69%

source: reed

Calamos also plans to launch “floor” funds that would provide 90% and 80% protection for Bitcoin, allowing for some initial losses in exchange for more upside.

Kaufman said the structure of an effective Bitcoin product might look different than a traditional buffer fund, which protects against first-percent losses due to the cryptocurrency’s volatility.

“If you look at the S&P 500 returns, it looks like a normal bell curve distribution. If you look at the distribution of Bitcoin returns, it looks more like a smile. It’s all left Tail risk or far-right risk to the upside, so if you build a buffer, you’re not actually protecting against anything,” Kaufman said.