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ZEC $1,146 BlackRock files for bitcoin ETF designed to limit losses
The proposed iShares Bitcoin Managed Protection ETF, ticker PBIT, would use options and fixed income rather than holding bitcoin directly.
Key takeaways
- Losses capped near 10%. The structure would initially limit losses to approximately 10% of the reference asset's starting value per tranche, before expenses.
- IBIT holds $65.34 billion. BlackRock reported approximately $65.34 billion in net assets for its spot bitcoin ETF IBIT as of Oct. 16.
- Third bitcoin ETF filing. Bloomberg Intelligence analyst James Seyffart noted this is the third bitcoin ETF filing from BlackRock.
What happened
BlackRock filed with the U.S. Securities and Exchange Commission on Oct. 19 for the iShares Bitcoin Managed Protection ETF, which would trade under the ticker PBIT. The fund would not hold bitcoin or bitcoin exchange-traded products directly. Instead, it would use options contracts and fixed-income securities.
The fund would generally use three overlapping sets of options contracts, called tranches, starting in different months. Call options would generally be purchased with strike prices approximately 10% below the reference asset's starting value. That structure would initially limit losses to approximately 10% of that starting value for each tranche, before expenses.
The fund expects to use Flexible Exchange Options, exchange-traded contracts with customizable terms, and may adjust its options positions as market conditions change. Its strategy would also include cash, money market funds, short-term government obligations and investment-grade fixed-income securities.
First $84.4KLatest $81.4K-3.6% over the period
Points are daily observations, not closing prices.
Why it matters
The filing adds a different structure to BlackRock's bitcoin lineup. Bloomberg Intelligence senior analyst James Seyffart called the product a buffer bitcoin ETF and noted it is the third bitcoin ETF filing from the asset manager. He also said BlackRock still offers only bitcoin and ethereum products, with no other cryptos.
The protection is not complete. BlackRock's filing states that shareholders could still lose some or all of their investment, and that thresholds could change. The fund could also underperform bitcoin in rising markets, with volatility and trading expenses potentially weakening its downside protection.
BlackRock's existing spot bitcoin fund, the iShares Bitcoin Trust ETF (IBIT), held approximately $65.34 billion in net assets as of Oct. 16, according to BlackRock's published figures. CoinGape reported IBIT at $65.1 billion in assets under management, as tracked by The Block's Bitcoin ETF tracker.
What is still unclear
- The filing does not settle the fund's protection threshold, upside cap or management fee, which market participants are watching as registration continues.
Questions readers ask
What is the BlackRock PBIT bitcoin ETF?
It is the proposed iShares Bitcoin Managed Protection ETF. BlackRock filed with the SEC for it on Oct. 19, and it would trade under the ticker PBIT. It would use options and fixed-income investments instead of holding bitcoin directly.
Does PBIT hold bitcoin directly?
No. The proposed fund would not directly hold bitcoin or bitcoin exchange-traded products. It would seek gains linked to IBIT or similar bitcoin-linked assets through options contracts and fixed-income securities.
How much protection does the fund offer?
The structure would initially limit losses to approximately 10% of the reference asset's starting value for each tranche, before expenses.
How large is BlackRock's IBIT fund?
BlackRock reported approximately $65.34 billion in net assets for IBIT as of Oct. 16. CoinGape reported $65.1 billion in assets under management, as tracked by The Block's Bitcoin ETF tracker.
