New York City-based BlackRock is not venturing into uncharted territory.
Calamos introduced its initial trio of protected bitcoin exchange-traded funds (ETFs) at the start of 2025, providing investors with options that include full downside protection or limitations on losses set at 10% or 20% over a specified timeframe.
The recent filing from BlackRock did not specify the extent of downside protection that the new fund would provide, nor did it clarify the potential for investors to leverage bitcoin’s upward movement.
Calamos allocates around 90% of the assets in their funds to U.S. Treasury securities and invests the remainder in bitcoin-linked options. This strategy allows investors to gain from bitcoin’s appreciation, capped at a predetermined level, while also restricting losses for a specific duration.
This approach has resonated with investors. Matt Kaufman, Calamos’ ETF leader, mentioned in May that the protected bitcoin funds had garnered between $10 million and $15 million in just a few weeks, contrasting with the outflows experienced by spot bitcoin ETFs during the same period.
Meanwhile, BlackRock has been exploring investments beyond traditional bitcoin tracking funds.
This past June, it rolled out the Bitcoin Premium Income Fund (BITA), which incorporates bitcoin alongside IBIT shares, while also selling call options on approximately 25% to 35% of its holdings to generate monthly income.
“Investors from various backgrounds are seeking ways to earn income while maintaining a primarily long position in bitcoin,” stated Jay Jacobs, BlackRock’s head of U.S. equity ETFs, in a conversation with CoinDesk.