In brief – BlackRock has filed for the iShares Bitcoin Managed Protection ETF, a “buffer” fund that would trade under the ticker PBIT. – The fund would buy and sell options on IBIT and similar bitcoin exposure, typically limiting each tranche’s initial losses to about 10% while…
pping gains. – IBIT drew $665.2 million on Monday, the only one of 12 U.S. spot Bitcoin ETFs to post net inflows, according to SoSoValue. BlackRock has filed to launch a “buffer” Bitcoin ETF that would cap investors’ gains in exchange for limiting their losses, according to a filing with the Securities and Exchange Commission on Monday
The iShares Bitcoin Managed Protection ETF, which would trade under the ticker PBIT, “seeks to provide upside exposure to the iShares Bitcoin Trust ETF (IBIT) and/or similar bitcoin exposure up to an approximate limit, while seeking to provide a level of downside protection,” the filing says. The management fee has not yet been filled in. The fund would not hold Bitcoin or Bitcoin ETFs directly.
Instead, it would buy call options on IBIT or similar Bitcoin exposure and sell higher-priced calls to help cover the cost, in three overlapping tranches with staggered monthly start dates, so that one tranche expires and a new one begins each month. It would also hold fixed-income investments to earn interest. Each tranche’s protection typically starts at about 90% of the reference asset’s value, limiting its initial losses to roughly 10% before fees, according to the filing.