Key Takeaways
- • BlackRock has filed with the SEC for the iShares Bitcoin Managed Protection ETF (ticker PBIT), filed October 19, which would absorb roughly the first 10% of Bitcoin losses in exchange for capping gains.
- • PBIT would be an options-based fund built on BlackRock's spot Bitcoin ETF IBIT, buying calls near 90% of IBIT's value and selling higher-strike calls to fund the protection.
- • The fund is filed under the Investment Company Act of 1940, which could let it reach brokerage platforms and model portfolios that exclude IBIT's grantor-trust structure.
- • The fund is not yet trading, its fee is blank, and it is unlikely to launch before 2027 under typical 75-day effectiveness timing.
- • Rival protected Bitcoin funds from Calamos, Innovator and FT Vest charge around 0.79% a year, more than three times IBIT's 0.25% fee, and the capped funds have trailed in the current drawdown.
Summary
BlackRock's proposed iShares Bitcoin Managed Protection ETF, filed with the SEC on October 19 under the ticker PBIT, would give investors Bitcoin exposure with roughly the first 10% of losses absorbed in exchange for a cap on gains, according to Tokenist. The fund is aimed at advisers and cautious investors who want Bitcoin exposure without its full volatility. It is not yet trading and its fee has not been disclosed.
The timing is notable: Bitcoin trades near $81,700, about 35% below its October 2025 record, after falling as low as $57,800 in July. The preliminary prospectus states that PBIT will not hold Bitcoin or Bitcoin ETFs directly. Instead, it will buy call options on IBIT and similar products, sell higher-strike calls to offset the cost, and hold the remainder in cash and short-term bonds. Positions are split into three overlapping tranches with start dates one month apart. Each begins with bought calls near 90% of IBIT's value, setting a maximum loss of about 10% per tranche before fees. The sold calls cap gains at levels that will change with market conditions when each tranche starts. The prospectus stresses that the protection is not guaranteed, that investors "may lose some or all of their money," and that investors buying mid-tranche may receive a buffer different from 10%.
The purpose is to make Bitcoin accessible to investors who cannot tolerate its swings, given that BTC has dropped more than 50% from its peak twice in five years. PBIT is registered under the Investment Company Act of 1940, the framework governing mutual funds and most ETFs, whereas IBIT is a grantor trust holding Bitcoin. Tokenist notes that some brokerage platforms and model portfolios only accept 1940 Act funds, so PBIT could expand BlackRock's Bitcoin offering to channels IBIT cannot reach.
Calamos, Innovator and FT Vest already offer Bitcoin funds with floors, and Calamos runs laddered funds using a similar monthly structure. According to the article, the capped funds have performed as designed: investors in Calamos's 100% fund are flat this year while BTC is down, but the uncapped 20% floor fund underperformed IBIT. Calamos charges 0.79% annually for its 100% and 90% laddered funds, more than three times IBIT's 0.25% fee. IBIT holds about $65 billion and led roughly $1 billion of spot Bitcoin ETF inflows earlier in the week. PBIT is positioned for investors who would accept capped upside rather than absorb a 50% drawdown.
The timing is notable: Bitcoin trades near $81,700, about 35% below its October 2025 record, after falling as low as $57,800 in July. The preliminary prospectus states that PBIT will not hold Bitcoin or Bitcoin ETFs directly. Instead, it will buy call options on IBIT and similar products, sell higher-strike calls to offset the cost, and hold the remainder in cash and short-term bonds. Positions are split into three overlapping tranches with start dates one month apart. Each begins with bought calls near 90% of IBIT's value, setting a maximum loss of about 10% per tranche before fees. The sold calls cap gains at levels that will change with market conditions when each tranche starts. The prospectus stresses that the protection is not guaranteed, that investors "may lose some or all of their money," and that investors buying mid-tranche may receive a buffer different from 10%.
The purpose is to make Bitcoin accessible to investors who cannot tolerate its swings, given that BTC has dropped more than 50% from its peak twice in five years. PBIT is registered under the Investment Company Act of 1940, the framework governing mutual funds and most ETFs, whereas IBIT is a grantor trust holding Bitcoin. Tokenist notes that some brokerage platforms and model portfolios only accept 1940 Act funds, so PBIT could expand BlackRock's Bitcoin offering to channels IBIT cannot reach.
Calamos, Innovator and FT Vest already offer Bitcoin funds with floors, and Calamos runs laddered funds using a similar monthly structure. According to the article, the capped funds have performed as designed: investors in Calamos's 100% fund are flat this year while BTC is down, but the uncapped 20% floor fund underperformed IBIT. Calamos charges 0.79% annually for its 100% and 90% laddered funds, more than three times IBIT's 0.25% fee. IBIT holds about $65 billion and led roughly $1 billion of spot Bitcoin ETF inflows earlier in the week. PBIT is positioned for investors who would accept capped upside rather than absorb a 50% drawdown.
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