Calamos Investments Announces the Launch of a Bitcoin ETF That Guarantees 100% Downside Protection

Scheduled for release on January 22, 2025, the fund, named CBOJ, will trade on the Chicago Board Options Exchange.

Calamos Investments is introducing a Bitcoin ETF that guarantees 100% downside protection. Launching on the Chicago Board Options Exchange on January 22, 2025, the fund will be called CBOJ and aims to reduce the volatility of Bitcoin investing, making it more appealing to cautious investors.

Bitcoin, which is known for its drastic price movements, has often deterred risk-averse investors from joining the cryptocurrency space. However, Calamos is attempting to change this narrative with a unique structure.

The fund will combine U.S. Treasury bonds and options that are linked to the Cboe Bitcoin US ETF Index (BTI). Through this structure, the fund promises no losses, even if Bitcoin prices take a downturn, while still offering growth potential.

“Many investors have been hesitant to invest in bitcoin due to its epic volatility. […] Calamos 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 [the asset],” said Matt Kaufman, Head of ETFs at Calamos.

CBOJ ETF Annual Reset Ensures Full Protection Against LossesThe CBOJ ETF will introduce an annual reset, providing investors with a fresh cap on potential gains each year while retaining full protection against losses. This design follows Calamos’ Structured Protection ETF series, which was launched in 2024 and focused on stock indices like the S&P 500 and Nasdaq-100.

Source: Calamos InvestmentsDefined outcome products, such as buffer funds, have grown in popularity, especially after the 2022 market downturn that saw both stocks and bonds decline. The CBOJ extends that strategy to Bitcoin, blending traditional risk management with the growth opportunities of the cryptocurrency.

Spot Bitcoin ETFs, which were introduced in January 2024, marked a historic moment in the crypto space by driving Bitcoin ( BTC ) to a record high above $108,000. Among them, the iShares Bitcoin Trust ETF (IBIT) took the lead, amassing over $50 billion in assets.

Structured Funds Bridges the Bitcoin GapKaufman highlighted that, despite these successes, financial advisors still express concern over Bitcoin because of its history of volatility. According to him, structured funds like CBOJ can bridge that gap, allowing investors to combine direct Bitcoin ETFs with risk-managed strategies.

Other major players, including Innovator and First Trust, are also developing funds with similar strategies. Additionally, firms like Grayscale and Roundhill have filed for Bitcoin-based income-generating funds, such as covered call ETFs, further expanding the market’s scope.

The Calamos fund is designed to be held for a full year, from January 22, 2025, to January 31, 2026. With an upside cap determined by options pricing, the ETF's appeal lies in its ability to protect against losses while offering exposure to Bitcoin’s potential gains. For those looking to dip their toes into cryptocurrency without the wild ride, CBOJ might just be the ticket.