Latest developments: Calamos says its protected Bitcoin ETFs are attracting inflows even as spot Bitcoin ETFs see redemptions.
- Matt Kaufman, head of ETFs at Calamos, stated the firm saw roughly $10 million to $15 million in inflows over the past several weeks.
- Kaufman stated advisors are increasingly looking for Bitcoin exposure that reduces volatility and downside risk.
- The firm offers three versions of its protected Bitcoin ETFs, including products with full downside protection and others with 10% or 20% downside risk.
- “You can get upside of Bitcoin with no downside risk,” Kaufman stated.
- Kaufman joined CoinDesk’s Jennifer Sanasie on Public Keys.
How it works: Calamos structures the products using Treasuries and options tied to Bitcoin-linked indexes.
- Kaufman stated the firm allocates roughly 90% of assets into Treasuries to build downside protection.
- The remaining budget is used to buy Bitcoin-linked call spreads through FLEX options.
- Calamos created its own Bitcoin-linked index and listed FLEX options tied to that index after the launch of spot Bitcoin ETF options.
- The products are offered in quarterly structures as well as laddered versions designed for model portfolios.
What advisors are asking: Wealth managers are becoming more sophisticated in how they evaluate crypto exposure.
- Kaufman stated advisors previously focused on whether Bitcoin belonged in portfolios at all.
- Now, advisors are asking how to improve risk-adjusted returns and portfolio construction using crypto exposure.
- Calamos positions its products as alternatives to traditional portfolio allocations, including broad equities, bonds and cash.
- Kaufman stated some investors are moving from cash-like products into fully protected Bitcoin ETFs tied to Bitcoin performance but without downside exposure.
Reading between the lines: The crypto ETF market is evolving beyond simple spot exposure.
- Kaufman stated the industry is increasingly dividing crypto ETF strategies into three categories: protection, income and growth.
- Calamos previously introduced auto-callable income ETFs and is exploring additional crypto-related strategies.
- Other ETF issuers have focused on generating yield from Bitcoin volatility through options-based products.
- “You don’t just have to sit in the spot vehicle anymore and ride out those waves,” Kaufman stated.
What comes next: Calamos anticipates Bitcoin volatility to remain a defining feature of the asset.
- Kaufman stated he anticipates Bitcoin to revisit previous highs despite recent market turbulence.
- He argued Bitcoin’s volatility profile creates opportunities for structured products and options-based strategies.
- “I think we’re going higher,” Kaufman stated.
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