Key Takeaways
- • BlackRock filed on Monday for the iShares Bitcoin Managed Protection ETF (PBIT), a buffered bitcoin fund offering 10% downside protection through three overlapping options tranches.
- • PBIT becomes BlackRock's third bitcoin fund, joining the iShares Bitcoin Trust ETF (IBIT) and the iShares Bitcoin Premium Income ETF (BITA).
- • Bitcoin is down more than 35% from its record price of $126,080 set last October, underscoring demand for downside-protected crypto exposure.
- • Competitors Calamos, Innovator, and FT Vest already offer volatility-managed or buffered bitcoin ETFs, and no dominant player has yet emerged in the segment.
Summary
BlackRock on Monday filed for a buffered bitcoin fund, the iShares Bitcoin Managed Protection ETF (PBIT), according to the primary report from The Daily Upside. The product will provide investors with 10% downside protection through three overlapping options tranches. The filing marks the firm's entry into structured protection for crypto and its third bitcoin fund, following the iShares Bitcoin Trust ETF (IBIT) and the iShares Bitcoin Premium Income ETF (BITA).
The move reflects BlackRock's willingness to use options to manage risk in digital assets, given bitcoin's volatility. Bitcoin is down more than 35% from its record price of $126,080 set last October. Bilal Little, global ETF strategist at Direxion and a former BlackRock employee, said the filing is a notable step for the manager, adding that BlackRock considers how asset classes fit together within portfolio construction. Little also said that investors seeking income, stability or growth are willing to give up some upside in exchange for a guaranteed rate of return, which he sees as a driver of volatility-managed bitcoin launches.
Buffered crypto products are gaining traction in a market dominated by BlackRock's IBIT, which recently recorded its largest single-day inflow in a year. Such funds may also serve as an alternative to leveraged bitcoin funds, which have been launching rapidly. Competing issuers already offer similar products. Calamos runs a series of laddered structured protection bitcoin ETFs, including CBOL, CBXL and CBTL. Innovator's Uncapped Bitcoin 20 Floor ETF (QBF) provides bitcoin exposure with a 20% downside floor. FT Vest's Bitcoin Strategy Floor15 ETFs carry a current cap of nearly 27% and a 15% floor.
Grant Ogard, portfolio manager at BufferLabs, said no dominant player has yet emerged in buffered crypto ETFs. He expects investors new to crypto to be more likely to enter these vehicles, noting that the bitcoin audience is narrower than the audience for buffered bitcoin products and that buffered structures can appeal to investors wary of crypto risk.
The move reflects BlackRock's willingness to use options to manage risk in digital assets, given bitcoin's volatility. Bitcoin is down more than 35% from its record price of $126,080 set last October. Bilal Little, global ETF strategist at Direxion and a former BlackRock employee, said the filing is a notable step for the manager, adding that BlackRock considers how asset classes fit together within portfolio construction. Little also said that investors seeking income, stability or growth are willing to give up some upside in exchange for a guaranteed rate of return, which he sees as a driver of volatility-managed bitcoin launches.
Buffered crypto products are gaining traction in a market dominated by BlackRock's IBIT, which recently recorded its largest single-day inflow in a year. Such funds may also serve as an alternative to leveraged bitcoin funds, which have been launching rapidly. Competing issuers already offer similar products. Calamos runs a series of laddered structured protection bitcoin ETFs, including CBOL, CBXL and CBTL. Innovator's Uncapped Bitcoin 20 Floor ETF (QBF) provides bitcoin exposure with a 20% downside floor. FT Vest's Bitcoin Strategy Floor15 ETFs carry a current cap of nearly 27% and a 15% floor.
Grant Ogard, portfolio manager at BufferLabs, said no dominant player has yet emerged in buffered crypto ETFs. He expects investors new to crypto to be more likely to enter these vehicles, noting that the bitcoin audience is narrower than the audience for buffered bitcoin products and that buffered structures can appeal to investors wary of crypto risk.
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