The post New Calamos ETF Promises 100% Downside Protection Against Bitcoin (BTC) Price Volatility appeared on BitcoinEthereumNews.com.

A new exchange-traded fund (ETF) by global investment management firm Calamos that promises to protect investors from the volatility in bitcoin’s price hit the market on Wednesday. CBOJ, the first of three ETFs, provides investors with 100% downside protection while offering 10% to 11.5% upside potential over a one-year period, according to a press release. A representative of Calamos told CoinDesk that as of 12:11 p.m. ET, the ETF traded roughly 635,714 shares. The other two funds, CBXJ and CBTJ, set to launch on Feb. 4, will provide 90% and 80% protection, respectively, with capped upside of 28% to 30% and 50% to 55%. Downside protection is achieved through investments in U.S. Treasuries and options on Bitcoin index derivatives. The upside cap is set annually, and the period is reset every year with new terms. In simple terms, if an investor bought $100 worth of shares in the ETF, Calamos would put a percentage of that in Treasury bonds that would grow back to $100 over a one-year period, ensuring that regardless of where the price of bitcoin stands at the time, the investor has the full $100. The rest is used to buy options linked to the price of bitcoin, allowing exposure to the cryptocurrency while not directly owning it. This safety blanket doesn’t come cheap, however. The management fee for the ETFs is set at 0.69%, higher than that of other ETFs that invest in bitcoin. The average fee for U.S.-based ETFs is about 0.51%, making these ETFs a bit expensive for investors. However, the higher price might be worth paying for investors looking for safety from the volatile digital assets market. While “bitcoin maxis” and other investors believe in the long-term value increase of bitcoin, many, especially traditional institutional investors, worry about bitcoin’s volatility and periods of…

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Filed under: News - @ January 23, 2025 5:15 am