Summary:
Calamos Investments introduces a suite of Protected Bitcoin ETFs to minimize investment risk.
The flagship ETF offers 100% downside protection with an 11.65% upside cap.
Additional options provide 90% and 80% downside protection with varying upside caps.
ETFs use a strategy combining U.S. Treasury securities and options on the CBOE Bitcoin Index.
These products aim to provide a safer way for investors to gain Bitcoin exposure.
Introduction
Calamos Investments has unveiled a series of Protected Bitcoin Exchange-Traded Funds (ETFs), aimed at providing investors with exposure to Bitcoin (BTC) while minimizing associated risks.
What Happened
The leading ETF offers 100% downside protection over a one-year span, ensuring that investors' principal remains safe even if Bitcoin faces significant price declines. However, this protection comes with a trade-off: an upside cap of 11.65% for the year.
Understanding that investors have diverse risk appetites, Calamos has introduced additional ETFs with varying levels of protection. The first option offers 90% downside protection, with an estimated upside cap ranging from 28% to 31%. For those willing to take on more risk, the 80% protection option provides an estimated cap range of 50% to 55%.
How It Works
These ETFs utilize a structured investment strategy that combines U.S. Treasury securities and options on the CBOE Bitcoin Index. By purchasing zero-coupon Treasuries and strategically trading call options, these funds aim to offer defined exposure to Bitcoinâs price movements while ensuring specified levels of downside protection and upside potential.
Why It Matters
As the cryptocurrency market continues to experience volatile price swings, products like the Calamos Protected Bitcoin ETFs present a safer avenue for investors to gain exposure to Bitcoin. By guaranteeing principal protection while providing different levels of upside potential, these ETFs seek to bridge the gap between traditional risk-averse investing and the lucrative opportunities in the crypto space.
Itâs crucial to note that the capped gains may restrict returns during a bull market, making these ETFs more suitable for cautious investors aiming for moderate growth with reduced downside risk.
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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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