Bitcoin is known for its strong price volatility, causing many investors to be apprehensive. However, a new type of Bitcoin ETF promises to provide peace of mind with the ability to protect up to 100% of downside risk, opening up safer investment opportunities for both newcomers and professional investors.
Comprehensive Bitcoin ETF protection
• Launching the first product: A company with over $40 billion in assets under management will launch the first Bitcoin ETF with the ability to protect 100% of downside risk next Wednesday. The opening price of this ETF is expected to be $25.
• Mechanism of operation: This ETF will protect the entire investment capital from the price drop of Bitcoin, while the profit increase will be limited to 10% to 11.5% per year.
Why is this product important?
The high volatility of Bitcoin has caused many individual and institutional investors to hesitate to enter the market. According to a report from Fidelity Digital Assets, 48% of institutional investors consider price volatility the biggest barrier, and 22% are concerned about the issue of self-custody of assets.
Calamos believes this product will:
• Attract cautious investors such as financial advisors or older individuals who are generally risk-averse.
• Reduce investment risk: Create a 'safety net' for new investors entering the crypto market.
Other products are being developed
In the next two weeks, Calamos plans to launch two more types of ETFs:
1. Protect 80% of downside risk: With a maximum profit of 28%-31%.
2. Protect 90% of downside risk: With a maximum profit of 50%-55%.
These products will combine U.S. government bonds and flexible options on the Bitcoin index to manage risk.
Bitcoin ETF and the market
Last year, U.S. spot Bitcoin ETFs attracted $36.2 billion in inflows, contributing to Bitcoin's price increase from $46,000 to nearly $107,000. However, many investors are still seeking to learn more before participating.
Conclusion
With superior risk protection capabilities, Calamos's new Bitcoin ETFs could become an attractive option for investors wanting to enter the crypto market without worrying about strong price volatility. This is also an important step to help Bitcoin reach cautious and older investor groups.