Key Takeaways
- • iShares Trust filed on Oct. 19 to propose the iShares Bitcoin Managed Protection ETF (PBIT), a Bitcoin fund that pairs asset exposure with options-based downside protection while capping upside.
- • PBIT would use overlapping options tranches, each typically starting with a protection level near 90% of the reference asset's value, leaving about 10% initial loss exposure before fees and expenses.
- • The filing states protection floors and upside caps may differ among tranches and change over time, and the fund is not a stated maximum-loss limit.
- • PBIT would not invest directly in Bitcoin or Bitcoin ETPs, and the product remains a proposal whose shares cannot yet be sold.
- • Bitcoin options accounted for 58.9% of $129 billion in derivatives open interest in an Oct. 15 snapshot, underscoring the depth of the options market BlackRock is drawing on.
Summary
An Oct. 19 filing by iShares Trust proposes a Bitcoin fund designed to combine exposure to the asset with options-based downside protection, at the cost of limiting potential gains, according to tokenpost.com. The proposed iShares Bitcoin Managed Protection ETF (PBIT) would use overlapping options tranches. Each tranche would typically begin with a protection level near 90% of its reference asset's value when its options are acquired, which leaves roughly 10% initial loss exposure to the reference asset before fees and expenses. The filing clarifies that this is not a stated maximum-loss limit for PBIT investors. Protection floors and upside caps can differ among tranches and may change over time.
PBIT would not invest directly in Bitcoin or Bitcoin exchange-traded products. The fund remains a proposal, and its shares cannot yet be sold.
The filing sits alongside BlackRock's existing options-based product. The iShares Bitcoin Premium Income ETF (BITA) seeks monthly premium income by selling call options on the iShares Bitcoin Trust ETF (IBIT), covering about 25% to 35% of its portfolio. Those calls can reduce BITA's participation if Bitcoin rises sharply, a trade-off that mirrors the capped-upside structure proposed for PBIT.
The proposals come against a backdrop of heavy options activity in the asset. Bitcoin options represented 58.9% of $129 billion in derivatives open interest in an Oct. 15 snapshot, according to the same report.
PBIT would not invest directly in Bitcoin or Bitcoin exchange-traded products. The fund remains a proposal, and its shares cannot yet be sold.
The filing sits alongside BlackRock's existing options-based product. The iShares Bitcoin Premium Income ETF (BITA) seeks monthly premium income by selling call options on the iShares Bitcoin Trust ETF (IBIT), covering about 25% to 35% of its portfolio. Those calls can reduce BITA's participation if Bitcoin rises sharply, a trade-off that mirrors the capped-upside structure proposed for PBIT.
The proposals come against a backdrop of heavy options activity in the asset. Bitcoin options represented 58.9% of $129 billion in derivatives open interest in an Oct. 15 snapshot, according to the same report.
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