Calamos Investments is introducing a Bitcoin exchange-traded fund with 100% downside protection.
The ETF named CBOJ is scheduled to launch on the Chicago Board Options Exchange on January 22nd. This exchange-traded fund, as stated in a company announcement, seeks to manage Bitcoin’s price fluctuations while providing opportunities for growth.
As a cautious crypto investor, I’ve always been hesitant about Bitcoin (BTC) due to its erratic price fluctuations. However, the introduction of the CBOE VanEck Bitcoin ETF promises to alleviate these concerns as it guarantees that investors won’t incur losses, even if the value of Bitcoin decreases.
This protective strategy is realized by blending U.S. Treasury bonds with options linked to the CBOE Bitcoin US ETF Index. In essence, this setup offers a controlled and clear approach for investors seeking Bitcoin exposure, all while reducing potential risks.
CBOJ is a development that expands upon Calamos’ line of Structured Protection ETFs, introduced in 2024, offering comparable safeguards to stock indexes such as the S&P 500 and Nasdaq-100.
Annual protection reset
Differently from conventional ETFs, CBOJ recalibrates its loss protection mechanism every year. This implies that investors are given a fresh limit for possible profits each year, while maintaining unwavering protection against potential losses for the following twelve months.
Matt Kaufman, Head of ETFs at Calamos, stated that many investors are holding back from investing in bitcoin because of its significant price fluctuations. However, Calamos aims to develop investment solutions that enable advisors, institutions, and individual investors to capitalize on Bitcoin’s growth potential while minimizing the historically high volatility and losses associated with this asset.
As a researcher, I came across a report from December 2024 suggesting that some prominent exchanges, including Calamos, might be exploring derivatives-backed Bitcoin Exchange Traded Funds (ETFs) to offer a safer investment option for cautious investors looking to navigate the volatile price fluctuations characteristic of Bitcoin.
Exchange-traded funds (ETFs) work similar to regular stocks but represent a collective investment in a portfolio of assets. Investors can combine their resources within these funds.
Fundamentally, CBOJ provides an avenue for investors to experience the benefits of Bitcoin investment indirectly. This is done in a manner that reduces potential risks by incorporating a secure framework.
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2025-01-06 19:51