Bitcoin Without The Whiplash? Calamos Unveils Risk-Mitigated CBOJ ETF

When it comes to paradigm-shattering investments, few publicly traded assets can match the potential of Bitcoin (CRYPTO: BTC). This simple but powerful reality offers intrigue for financial service provider Calamos’ upcoming exchange-traded fund uniquely focused on BTC.

By now, arguably, every active investor will be familiar with the growth trajectory of Bitcoin. As Benzinga’s Chris Katje noted in November last year, investing $1 in BTC back when the blockchain asset was first introduced would have been worth nearly $109 million at the time of writing.

Once the exclusive domain of a select few proponents, Bitcoin and the broader cryptocurrency ecosystem have radically altered the financial and even geopolitical narrative. Increasingly, young investors – particularly those who came of age during the advent of the internet – are directing their portfolios to decentralized digital assets. All evidence indicates the trend could accelerate with future generations of workers.

On a much wider scale, nations like El Salvador have enthusiastically embraced cryptos, thus normalizing what was once considered a highly speculative investment category. Even more influentially, Bitcoin represented a key talking point throughout the 2024 presidential election. With President Donald Trump seemingly set to prioritize the establishment of a national BTC reserve, the future for virtual currencies appears brighter than ever.

However, Bitcoin can’t ignore a critical weakness: extreme volatility.

While the media celebrated Bitcoin’s ascension above the $100,000 milestone unit price, it has previously criticized the wild volatility. Respected publications have warned about the shifts from rags to riches back to rags, often occurring within a matter of weeks. A Yale Law School paper once broadcasted the so-called “death” of cryptos.

But what if an investment vehicle could provide the growth of Bitcoin while controlling for the risks over specific outcome periods? This best-of-both-worlds-approach symbolizes the main ethos undergirding Calamos’ upcoming BTC-centric product.

Capitalizing On Bitcoin’s Potential While Controlling For The Pitfalls

Undeniably, what has aided Bitcoin’s ascension is its rawness. Unfettered by traditional protocols, Bitcoin and other cryptos traded freely in global exchanges, without regard to calendars, customs or cultures. However, the frontier nature of the blockchain also sparked considerable wildness and unpredictability.

With Calamos’ soon-to-be launched ETF product, the financial services provider offers a novel approach to cryptos. As a global investment firm with over $40 billion in assets under management and trusted by over 41,000 intermediaries, Calamos has made its name within the risk management industry. It also focuses on delivering groundbreaking innovations, a heritage that this ETF product seeks to uphold.

Called the Calamos Bitcoin Structured Alt Protection ETF, the fund – which will feature the ticker symbol CBOJ and be listed on the Chicago Board Options Exchange (CBOE) – will be the world’s first 100% downside protected Bitcoin ETF.

“Many investors have been hesitant to invest in Bitcoin due to its epic volatility,” stated Matt Kaufman, Head of ETFs at Calamos. In response, the investment firm “seeks to meet advisor, institutional and investor demands for solutions that capture bitcoin’s growth potential while mitigating the historically high volatility and drawdowns of this fast-growing and high performing asset.”

By leveraging a combination of government-backed bonds and financial derivatives, this actively managed fund will provide a regulated mechanism to access the namesake digital asset within a risk-controlled framework. Furthermore, Calamos’ website notes that “CBOJ resets annually, offering investors a new upside cap with refreshed protection against negative bitcoin returns over the subsequent 12-month period.”

With units of the fund facilitating an indefinite holding period, the CBOJ ETF could be the new solution for crypto-focused growth initiatives.

How Does 100% Downside Protection Work?

The cornerstone of the Calamos Bitcoin Structured Alt Protection ETF lies in its structured design, which prioritizes preserving investor capital while maintaining exposure to Bitcoin’s growth potential. The promise of “100% downside protection” isn’t a guarantee in the absolute sense but a carefully engineered safeguard against negative returns over a defined outcome period – in this case, 12 months.

At its core, the fund achieves this through a combination of U.S. Treasuries and exchange-listed options tied to the CBOE Bitcoin US ETF Index. Treasuries, considered among the safest financial instruments globally, anchor the fund’s principal, providing a …

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