Structured products pair Treasuries and options to reduce downside risk
Calamos is launching three versions of protected Bitcoin ETFs designed to cap losses while preserving upside exposure, as the asset manager reports inflows shifting away from unhedged spot Bitcoin products.
More than $1 billion exited spot Bitcoin ETFs last week, according to Calamos. The firm attributes the outflow to growing investor demand for downside protection, with its own protected Bitcoin ETFs attracting $10 million to $15 million in inflows over the past several weeks.
The protected structures allocate approximately 90% of assets to Treasuries and use Bitcoin-linked call spreads via FLEX options to limit losses while maintaining upside participation. Calamos offers variants with 10% or 20% downside risk protection.
“You can get upside of Bitcoin with no downside risk,” Matt Kaufman, head of ETFs at Calamos, said in an interview. “You don’t just have to sit in the spot vehicle anymore and ride out those waves.”
Calamos created its own Bitcoin-linked index and listed FLEX options tied to that index following the launch of spot Bitcoin ETF options. The protected ETFs are offered in quarterly structures and laddered versions designed for model portfolios.
The shift reflects a broader evolution in wealth management. Advisors are moving beyond debating whether Bitcoin belongs in portfolios to focusing on how to improve risk-adjusted returns using crypto exposure. The crypto ETF market is fragmenting into three categories: protection, income, and growth.
Calamos previously launched auto-callable income ETFs and is exploring additional crypto-related strategies. Kaufman expressed confidence in Bitcoin’s near-term direction. “I think we’re going higher,” he said.
The protected Bitcoin ETF category represents a structural response to volatility concerns that have historically deterred institutional adoption. By pairing Treasury allocations with options strategies, Calamos is targeting wealth managers who want crypto exposure without the full downside swing of spot Bitcoin.
