Key Points
- BlackRock has filed to launch the iShares Bitcoin Managed Protect ETF, designed to provide exposure to Bitcoin’s gains while seeking to limit losses during market declines.
- Calamos Investments’ Bitcoin Structured Alt Protection ETF – October (CBOO) fell just 1% during its protection period beginning in October 2025, despite Bitcoin declining as much as 52% from its record high of approximately $126,000.
- BlackRock has not disclosed the proposed fund’s downside protection level or the portion of Bitcoin’s potential gains investors could capture, while its existing Bitcoin Premium Income Fund uses call options to generate monthly income.
BlackRock is expanding its range of Bitcoin investment strategies as demand grows for products that combine cryptocurrency exposure with mechanisms designed to manage downside risk. The world’s largest asset manager has filed for a new exchange-traded fund that would seek to participate in Bitcoin’s gains while limiting losses, following a market downturn that tested investors’ tolerance for the cryptocurrency’s volatility.
In a Monday filing with the US Securities and Exchange Commission, BlackRock proposed the iShares Bitcoin Managed Protect ETF. The fund would provide exposure to the iShares Bitcoin Trust ETF (IBIT) and potentially similar Bitcoin exposure, subject to an approximate upside limit, while seeking to provide a degree of downside protection.
The filing did not specify the level of protection the proposed fund would offer or how much of Bitcoin’s appreciation investors could retain. Those details will be central to assessing how the product balances capital protection against participation in market gains.
Calamos Offers a Precedent for Protected Bitcoin Exposure
BlackRock’s proposal follows the introduction of protected Bitcoin ETFs by Calamos Investments in early 2025. The firm’s product lineup includes strategies offering full downside protection or limiting losses to 10% or 20% over a defined period, alongside caps on potential gains.
Calamos’ Bitcoin Structured Alt Protection ETF – October (CBOO) illustrates how these structures can perform during a market downturn. According to a company spokesperson, the fund declined just 1% from the beginning of its one-year protection period in October 2025.
Bitcoin, by contrast, fell as much as 52% from its record high of approximately $126,000 during the selloff described in the report.
The comparison highlights the potential value of structured investment products for investors who want exposure to Bitcoin but are unwilling to accept the full impact of its price swings. However, CBOO’s reported performance reflects a specific protection period and should not be interpreted as a guarantee that similar products will avoid losses in future downturns.
How Protected Bitcoin ETFs Manage Risk
Calamos allocates approximately 90% of its protected funds’ assets to US Treasury securities and uses the remainder to purchase Bitcoin-linked options. The structure is designed to provide defined downside protection over a specified period while allowing investors to participate in Bitcoin’s gains up to a predetermined cap.
The approach differs from holding Bitcoin directly or investing in a conventional spot Bitcoin ETF. Direct exposure generally leaves investors fully exposed to changes in the underlying asset’s price, whereas a structured protection strategy uses other financial instruments to alter the distribution of potential returns.
These protections come with trade-offs. Limits on upside participation can prevent investors from capturing the full benefit of a strong Bitcoin rally. Outcomes can also depend on the protection period, option pricing and the precise terms of the product.
BlackRock’s filing has not yet provided enough detail to determine how its proposed fund will compare with Calamos’ existing offerings.
Investor Demand Supports Alternative Bitcoin Strategies
Calamos has reported interest in its protected Bitcoin products even during periods when conventional spot Bitcoin ETFs experienced outflows.
In May, Matt Kaufman, Calamos’ head of ETFs, said the protected funds had attracted between $10 million and $15 million over several weeks. The figures suggest that some investors were seeking alternative ways to maintain cryptocurrency exposure while managing the risk of a substantial decline.
The demand reflects a broader distinction within the Bitcoin investment market. Some investors prioritize maximum participation in price appreciation, while others place greater emphasis on reducing potential losses or generating income from their holdings.
Protected ETFs attempt to address the former concern by changing the risk-return profile of Bitcoin exposure rather than removing cryptocurrency risk entirely.
BlackRock Expands Beyond Spot Bitcoin Funds
The proposed managed protection ETF is part of BlackRock’s broader effort to develop investment products beyond straightforward Bitcoin price tracking.
Its iShares Bitcoin Trust (IBIT), launched in 2024, manages more than $65 billion in assets, according to the supplied report, making it the largest US spot Bitcoin ETF.
In June, BlackRock also launched the Bitcoin Premium Income Fund (BITA). The strategy holds Bitcoin and IBIT shares while selling call options on approximately 25% to 35% of its portfolio to generate monthly income.
Selling call options can produce income from option premiums, but it can also limit the gains available when the underlying asset rises above specified levels. The strategy therefore targets investors who want to retain substantial Bitcoin exposure while generating an additional income stream.
Together, the premium-income and proposed managed-protection approaches illustrate how asset managers are developing differentiated products for investors with varying objectives, from income generation to downside risk management.
Outlook
BlackRock’s proposed Bitcoin Managed Protect ETF would add another approach to the expanding market for structured cryptocurrency investments. Its competitiveness will depend on the level of downside protection offered, the cap on potential gains and the costs associated with the strategy. Calamos’ reported performance demonstrates that protected exposure can behave differently from direct Bitcoin holdings during a downturn, but investors will need to assess the final terms of BlackRock’s product before determining whether its balance of risk and return suits their objectives.
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