Key Points
- Calamos Investments is launching a Bitcoin ETF with 100% downside protection, scheduled for January 22, 2025.
- The ETF, named CBOJ, will trade on the Chicago Board Options Exchange and aims to make Bitcoin investing less volatile.
Calamos Investments has announced the launch of a Bitcoin ETF that guarantees 100% downside protection. The fund, named CBOJ, is set to be released on January 22, 2025, and will trade on the Chicago Board Options Exchange. The aim of the fund is to make Bitcoin investing less volatile and more appealing to cautious investors.
Bitcoin, with its known dramatic price swings, has often deterred risk-averse investors. Calamos seeks to change this narrative with a unique structure. The fund combines US Treasury bonds and options linked to the Cboe Bitcoin US ETF Index. The fund promises no losses, even if Bitcoin prices take a downturn, while offering growth potential.
Addressing Volatility Concerns
Matt Kaufman, Head of ETFs at Calamos, stated that many investors have been hesitant to invest in Bitcoin due to its high volatility. Calamos seeks to meet the demands for solutions that capture Bitcoin’s growth potential while mitigating the historically high volatility and drawdowns.
Annual Reset Mechanism and Full Protection Against Losses
The CBOJ ETF introduces an annual reset mechanism. This gives investors a fresh cap on potential gains each year while retaining full protection against losses. This design reflects the Calamos’ Structured Protection ETF series launched in 2024, which focused on stock indices like the S&P 500 and Nasdaq-100.
Defined outcome products, such as buffer funds, have grown in popularity, especially after the 2022 market downturn that saw both stocks and bonds decline. The CBOJ extends that strategy to Bitcoin, blending traditional risk management with the growth opportunities of cryptocurrency.
Spot Bitcoin ETFs, introduced in January 2024, marked a historic moment in the crypto space by driving Bitcoin to a record high above $108,000. Among them, the iShares Bitcoin Trust ETF (IBIT) emerged as a leader, amassing over $50 billion in assets.
Structured Funds Bridging the Bitcoin Gap
Despite these successes, Kaufman noted that financial advisors remain hesitant about Bitcoin due to its history of volatility. He believes structured funds like CBOJ can bridge that gap, allowing investors to combine direct Bitcoin ETFs with risk-managed strategies.
Other major players, including Innovator and First Trust, are also developing funds with similar strategies. Firms like Grayscale and Roundhill have filed for Bitcoin-based income-generating funds, such as covered call ETFs, further expanding the market’s scope.
The Calamos fund is designed to be held for a full year, from January 22, 2025, to January 31, 2026. With an upside cap determined by options pricing, the ETF’s appeal lies in its ability to protect against losses while offering exposure to Bitcoin’s potential gains. For those looking to dip their toes into cryptocurrency without the wild ride, CBOJ might just be the ticket.
