- BlackRock has filed for a new protected bitcoin ETF, entering a space pioneered by Calamos, which launched its first three such funds in early 2025.
- Calamos’ protected bitcoin ETFs allocate roughly 90% of assets to U.S. Treasuries and use the remainder to purchase bitcoin-linked options, capping gains while limiting downside losses.
- BlackRock separately launched the Bitcoin Premium Income Fund (BITA) in June, generating monthly income by selling call options on 25%–35% of its bitcoin and IBIT share holdings.
BlackRock Files for Protected Bitcoin ETF, Entering Territory Already Mapped by Calamos
BlackRock, headquartered in New York City, has filed for a protected bitcoin ETF — a product category it did not originate. Calamos Investments beat the world’s largest asset manager to market by debuting its first three protected bitcoin ETFs in early 2025, giving investors a tiered menu of downside protection options: full protection, a cap on losses at 10%, and a cap at 20%, each applying over a defined period. BlackRock’s filing, by contrast, did not specify how much downside protection the proposed fund would offer, nor how much of bitcoin’s potential upside investors would be allowed to capture.
How the Protected Bitcoin ETF Structure Works
The architecture underlying Calamos’ protected bitcoin ETFs follows a well-established buffer fund blueprint. Calamos allocates approximately 90% of each fund’s assets into U.S. Treasuries, providing a stable capital base, while deploying the remaining 10% to purchase bitcoin-linked options. This construction allows investors to participate in bitcoin price appreciation up to a predetermined cap, while shielding them from losses beyond the protection threshold over a set investment period. The model effectively trades unlimited upside exposure for measurable downside safety — a compelling proposition for institutional and risk-averse retail investors who want bitcoin exposure without its notorious volatility.
Investor Demand Proves Real, Even During Spot Bitcoin ETF Outflows
Despite being a newer and more complex product category, the protected bitcoin ETF format has demonstrated genuine market traction. Matt Kaufman, Calamos’ head of ETFs, said in May that the protected bitcoin funds had attracted between $10 million and $15 million over several weeks, even as spot bitcoin ETFs saw outflows. That divergence is significant: it suggests that a segment of investors is actively seeking structured exposure to bitcoin rather than direct price tracking, particularly during periods of broader market uncertainty or crypto-specific volatility.
BlackRock Expands Its Bitcoin ETF Ecosystem Beyond Price Tracking
The protected bitcoin ETF filing is not BlackRock’s only move to diversify beyond conventional spot bitcoin products. In June, the firm launched the Bitcoin Premium Income Fund (BITA), a fund that holds both bitcoin and shares of its own IBIT bitcoin ETF, while selling call options on roughly 25% to 35% of its portfolio to generate monthly income distributions. The strategy targets investors who want continued, substantial bitcoin exposure but also want their holdings to work harder on a cash-flow basis.
“There are investors across the spectrum … looking to generate some amount of income off of still having a mostly large, mostly long position to bitcoin,” Jay Jacobs, BlackRock’s U.S. head of equity ETFs, told CoinDesk at the time.
Together, BITA and the forthcoming protected bitcoin ETF represent a clear strategic direction for BlackRock: building a full suite of bitcoin-linked investment vehicles that serve distinct investor risk profiles, from income-seekers to capital-protection buyers, rather than relying solely on the flagship IBIT spot ETF.
Why This Matters
BlackRock’s entry into the protected bitcoin ETF segment carries outsized significance for the broader digital asset investment landscape. When the world’s largest asset manager validates a product structure by filing to replicate it, it typically accelerates institutional adoption and signals long-term viability to other major fund families still on the sidelines. Calamos carved out the category, but BlackRock’s scale, distribution network, and brand recognition could dramatically expand the addressable audience for structured bitcoin products. The critical unknowns — specifically what protection level and upside cap BlackRock will offer — will determine how directly it competes with Calamos’ existing three-fund lineup and where it positions itself in the risk-return spectrum. As the SEC reviews the filing, both asset managers and investors will be watching closely for those parameters.
Frequently Asked Questions
- What is a protected bitcoin ETF and how does it differ from a spot bitcoin ETF?
- A protected bitcoin ETF uses a structured approach — typically allocating most assets to U.S. Treasuries and a smaller portion to bitcoin-linked options — to limit how much investors can lose over a defined period while still allowing participation in bitcoin price gains up to a set cap. A spot bitcoin ETF, by contrast, directly tracks bitcoin’s market price, exposing investors to the full range of gains and losses.
- What protection levels does Calamos currently offer on its protected bitcoin ETFs?
- Calamos launched three protected bitcoin ETFs in early 2025 with three tiers: full downside protection, a maximum loss of 10%, and a maximum loss of 20% over a set period. Each tier comes with a corresponding cap on how much upside investors can capture.
- What details has BlackRock disclosed about its proposed protected bitcoin ETF?
- As of the time of the filing, BlackRock had not disclosed the specific level of downside protection its proposed fund would provide, nor the upside cap that would apply to investor returns. Those details are expected to emerge as the regulatory review process progresses.
