Bitcoin ETFs are hedged and offer risk mitigation
Calamos Investments, a global investment management firm, is offering hedged Bitcoin Exchange Traded Funds (ETFs) that offer investors exposure to Bitcoin while managing volatility risks.
The first ETF, CBOJ, was launched on January 20 and offers 100% downside protection over a one-year upside of 10% to 11.5%. Two additional funds, CBXJ and CBTJ, offering 90% and 80% minimum protection respectively, are expected to launch on February 4.
Each fund uses US Treasurys and options on Bitcoin (BTC) index derivatives to create a structural framework so investors can earn BTC returns with built-in risk management.
In an interview with CNBC, Matt Kaufman, head of Calamos ETFs, said the time is right to establish a U.S. bitcoin portfolio, saying bitcoin “could be a hedge against inflation.”
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Protected Bitcoin ETFs
According to Kaufman, investors in Calamos CBOJ can expect an upside return of 10-11.5% depending on market conditions, with 100% protection of the asset's value over a one-year yield period.
CBXJ and CBTJ provisions do not provide the same 100% protection, but provide significantly higher coverage caps of 28%–31% for CBXJ and 50%–55% for CBTJ.
According to a news release, this Bitcoin ETF's access-controlled hedging approach aims to provide “risk-managed Bitcoin exposure in a liquid, transparent and tax-efficient ETF structure with no credit risk.”
Related: Bitcoin Holds Over $106k as Traders Bite Nails Over No Trump Crypto Executive Order
ETF documents expected for 2025
In a CNBC interview, Kaufman highlighted the ongoing “flow of crypto-related ETF files,” and added that Calamos' protected Bitcoin ETF portfolio, CBOJ, is the first of its kind.
“We expect a pro-crypto economy over the next several years,” Kaufman said. “50 years ago we saw strategic oil reserves […] We have gold reserves. So if you're going to build a bitcoin reserve, we think now is a good time to do it.
On January 21, asset managers Osprey Funds and REX Shares launched ETFs for memecoins, including official Trump (TRUMP), Dogecoin (DOGE) and Bonk (BONK), reflecting the growing interest in various crypto investment options.
Related: 80% of Bitcoin Short Holders Return to Profits, Says Analyst ‘FOMO is in full swing'
Ethereum ETF issuers await stock approval.
Ether (ETH) ETF issuers expect a regulatory green light “soon” for stock-compensation funds, according to Consensus founder Joe Lubin.
Lubin said his team has been talking to ETF providers whose clients are “working hard to create the best solutions” to solve the complexities surrounding “putting and cutting.”
The US Securities and Exchange Commission 2024 spot Ether ETF approved, nine products launched in July, but regulatory body has yet to approve Ether ETF held in shares.
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