Key Takeaways
- • BlackRock filed with the SEC on Oct. 19, 2026 for the iShares Bitcoin Managed Protection ETF (PBIT), a proposed fund that would hold no direct Bitcoin and no spot Bitcoin ETP shares, gaining exposure instead through options and fixed-income securities.
- • PBIT's structure uses three overlapping long call-spread tranches with staggered monthly starts, each buying calls struck near 90% of the reference asset's value for roughly 10% initial downside buffer before fees, while selling higher-strike calls that cap gains.
- • BlackRock warns that a tranche's distance to its protection strike can exceed the original 10% as Bitcoin appreciates, and that investors can lose some or all of their investment.
- • Capital entering PBIT would reach Bitcoin only indirectly, through dealer hedging in IBIT shares, Bitcoin futures, or netted positions; a hypothetical $1 billion fund with a 0.40 net delta would create about $400 million of hedge-equivalent exposure.
- • Calamos's existing protected Bitcoin funds CBOJ ($15.9 million) and CBXJ ($16.4 million) as of Oct. 19 would need to grow roughly 61 times in CBXJ's case to match PBIT's hypothetical $1 billion scale.
Summary
BlackRock filed a preliminary prospectus with the SEC on October 19, 2026, for the iShares Bitcoin Managed Protection ETF (PBIT). According to the filing, the proposed fund would hold options and fixed-income securities and obtain Bitcoin exposure through derivatives, with no direct Bitcoin or spot Bitcoin ETP holdings. The securities cannot be sold until the registration statement becomes effective. The fund is registered under the Investment Company Act of 1940.
The prospectus describes three overlapping long call-spread tranches with staggered monthly starts, with one tranche typically replaced each month. Each tranche buys calls with a strike near 90% of the reference asset's value, providing roughly 10% initial exposure to declines before fees, and sells higher-strike calls that cap gains. Fixed-income holdings supply income and some loss mitigation. The filing's 80% investment policy counts qualifying fixed-income holdings used to implement the strategy, so it describes an asset mix rather than a defined Bitcoin exposure per dollar.
Money entering PBIT could reach Bitcoin through the dealers on the other side of its options. Dealers selling PBIT's options could hedge by trading IBIT shares or Bitcoin futures, or net the risk against existing positions. The prospectus acknowledges that PBIT's use of IBIT options could increase IBIT's assets and fees to BlackRock affiliates. A dealer buying existing IBIT shares from another investor leaves IBIT's Bitcoin holdings unchanged; new coins arrive only when authorized participants create new IBIT shares. In a hypothetical $1 billion PBIT with option notional equal to its assets and a net delta of 0.40, dealers would carry $400 million of hedge-equivalent exposure. If half were hedged through IBIT and a quarter of that produced creations, the result would be about $50 million, or roughly 610 BTC at $82,000.
BlackRock warns that protection is set tranche by tranche, so the roughly 10% buffer applies to each tranche individually. Because tranches start at different times and carry different strikes, a tranche's distance to its strike can exceed 10% once the reference asset appreciates. Option premiums, caps, fixed income, fees, and other tranches all shape actual returns. BlackRock reported nearly $15.5 trillion in assets under management at the end of the third quarter.
Calamos launched protected Bitcoin funds in 2025. As of Oct. 19, its CBOJ held $15.9 million and CBXJ held $16.4 million. For the January-series outcome period beginning Feb. 2, 2026, CBOJ had an initial upside cap of 8.36% before fees while targeting full protection, and CBXJ, which limits initial loss to 10% before fees, had a 22.24% cap. PBIT would need about 61 times CBXJ's current assets to reach $1 billion. The filing gives observers new indicators to track, including PBIT's net assets, IBIT shares outstanding, options notionals and strikes once published, and net creations.
The prospectus describes three overlapping long call-spread tranches with staggered monthly starts, with one tranche typically replaced each month. Each tranche buys calls with a strike near 90% of the reference asset's value, providing roughly 10% initial exposure to declines before fees, and sells higher-strike calls that cap gains. Fixed-income holdings supply income and some loss mitigation. The filing's 80% investment policy counts qualifying fixed-income holdings used to implement the strategy, so it describes an asset mix rather than a defined Bitcoin exposure per dollar.
Money entering PBIT could reach Bitcoin through the dealers on the other side of its options. Dealers selling PBIT's options could hedge by trading IBIT shares or Bitcoin futures, or net the risk against existing positions. The prospectus acknowledges that PBIT's use of IBIT options could increase IBIT's assets and fees to BlackRock affiliates. A dealer buying existing IBIT shares from another investor leaves IBIT's Bitcoin holdings unchanged; new coins arrive only when authorized participants create new IBIT shares. In a hypothetical $1 billion PBIT with option notional equal to its assets and a net delta of 0.40, dealers would carry $400 million of hedge-equivalent exposure. If half were hedged through IBIT and a quarter of that produced creations, the result would be about $50 million, or roughly 610 BTC at $82,000.
BlackRock warns that protection is set tranche by tranche, so the roughly 10% buffer applies to each tranche individually. Because tranches start at different times and carry different strikes, a tranche's distance to its strike can exceed 10% once the reference asset appreciates. Option premiums, caps, fixed income, fees, and other tranches all shape actual returns. BlackRock reported nearly $15.5 trillion in assets under management at the end of the third quarter.
Calamos launched protected Bitcoin funds in 2025. As of Oct. 19, its CBOJ held $15.9 million and CBXJ held $16.4 million. For the January-series outcome period beginning Feb. 2, 2026, CBOJ had an initial upside cap of 8.36% before fees while targeting full protection, and CBXJ, which limits initial loss to 10% before fees, had a 22.24% cap. PBIT would need about 61 times CBXJ's current assets to reach $1 billion. The filing gives observers new indicators to track, including PBIT's net assets, IBIT shares outstanding, options notionals and strikes once published, and net creations.
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