Calamos Unveils Suite of Bitcoin ETFs Offering Downside Protection and Capped Upside

• Calamos launches Bitcoin ETFs with 100%, 90%, and 80% downside protection caps up to 55%.
• Bitcoin ETF suite uses Treasuries and options, offering regulated, risk-managed BTC exposure.
• CBOJ debuts Jan. 20 with 100% downside protection; CBXJ and CBTJ follow Feb. 4.

Global investment management firm Calamos Investments has introduced a suite of protected Bitcoin exchange-traded funds (ETFs) that provide exposure to Bitcoin while lowering its volatility risks. It introduced the first ETF, CBOJ, which provided 100% downside protection with 10% to 11.5% capped upside over one year starting January 20, 2025. The launch date for two smaller funds is February 4, 2025; the downside protection is 90% for CBXJ and 80% for CBTJ, with upside caps of 28% to 31% and 50% to 55%, respectively.

The suite of ETFs will allow investors to gain regulated and risk-managed exposure to Bitcoin. The structured investment framework will contain a combination of US treasuries and options on Bitcoin index derivatives, which the funds will use. It aims to achieve an equilibrium between the upside potential and downside protection, helping to shield investors from Bitcoin’s well-known price volatility. These funds will trade on Cboe and are structured to reset annually, providing ongoing protection and annual highs and lows.

Structure and Protection Levels of Calamos Bitcoin ETFs

Calamos’ ETF suite consists of three ETFs, each with a different level of downside protection to suit the different investor risk appetites. The projected upside cap range of 10% to 11.5% was the first offering from CBOJ, the first fund to launch, for which there is 100% downside protection against the drop in the price of Bitcoin. It protects investors, enabling them to be protected and participate in Bitcoin’s price movements.

Subsequent ETFs, CBXJ and CBTJ, offer the potential for more upside at the cost of less downside protection. CBXJ offers 90% downside protection with a 28% to 31% upside ‘cap.’ CBTJ has a higher upside potential of 50% to 55% and offers 80% protection. The structures of the funds will be designed so that all funds will have a one-year outcome period and will protect investors from the volatile price movements in Bitcoin. However, these protections apply only if the funds are held for the full outcome period, which lasts one year.

Launch and Expense Structure

The funds will list on Cboe and begin trading at a $25 net asset value (NAV). These funds would allow investors to access these funds and get their desired protection level without being exposed to the volatility of Bitcoin overnight, which would otherwise affect the protection level. The management and operational costs will be covered in an annual expense ratio of 0.69% for each fund.

However, Calamos believes that the suite should attract investors keen to gain exposure to Bitcoin in a risk-managed manner as Bitcoin’s acceptance as an investment asset grows. ‘For investors looking for a straightforward, transparent, and tax-efficient way to invest in Bitcoin with no counterparty credit risk, these products are suitable,’ said Matt Kaufman, head of ETFs at Calamos.