Exciting New Bitcoin ETFs with Options Set to Launch in 2025!

Bitcoin ETFs have gained immense popularity among investors in 2024, and now asset management firms are innovating by combining crypto and derivatives in exchange-traded packages.

New Offerings from Calamos

This month, Calamos is set to launch a structured protection ETF designed to give investors exposure to Bitcoin while providing 100% downside protection. This fund will combine options exposure on the Cboe Bitcoin U.S. ETF Index with Treasury holdings, and it is structured to be held for 12 months. The exact upside cap will be determined on January 22, based on options pricing, and will trade under the ticker CBOJ.

The fund aims to bring a popular equity ETF strategy to the crypto investing world. The rise of defined outcome products, such as buffer funds, has been notable as investors seek new ways to diversify their portfolios, especially following the 2022 market sell-off that affected both stocks and bonds.

Record-Breaking Launch

Spot Bitcoin funds launched last January, achieving the best debut in ETF history and collectively drawing in tens of billions of dollars, contributing to Bitcoin's impressive surge past $100,000.

Calamos ETF Head, Matt Kaufman, highlighted that financial advisors are often hesitant to embrace Bitcoin due to its volatility. The structured funds like Calamos’ could appeal to those advisors, as they offer a risk-managed framework for accessing crypto.

Competitive Landscape

Calamos isn’t alone; firms like Innovator and First Trust are also preparing to launch similar funds, and there’s a growing interest in combining Bitcoin with income-generating strategies. More funds are expected to emerge throughout 2025, especially with a potentially more crypto-friendly Securities and Exchange Commission under President-elect Donald Trump.

How It Works

The Calamos fund will operate from January 22, 2025, to January 31, 2026. Since Bitcoin exposure is achieved through options, selling the fund early could lead to lower gains than expected in a Bitcoin rally, or even losses.

Calamos plans to introduce “floor” funds offering 90% and 80% protection for Bitcoin, allowing for initial losses in exchange for greater upside potential. Kaufman noted that the volatility of Bitcoin requires different structural approaches compared to traditional buffer funds.

Market Dynamics

The options market related to Bitcoin ETFs has only recently begun to develop, and liquidity issues have affected the performance of leveraged funds tied to Bitcoin proxies like MicroStrategy. However, Kaufman expressed confidence in the capacity of the options market for the Calamos funds.

Stay tuned for more updates on the evolution of Bitcoin ETFs and the exciting opportunities they present for investors!