Calamos Launches Bitcoin ETFs With 80% To 100% Downside Protection

Calamos, a global investment management firm overseeing $41.3 billion in assets, has made a significant entry into the cryptocurrency market with the launch of three bitcoin-focused funds. These funds are designed to shield investors from the volatility typically associated with bitcoin's price fluctuations. The funds, which include the Calamos Bitcoin Structured Alt Protection ETF (CBOJ), Calamos Bitcoin 90 Series Structured Alt Protection ETF (CBXJ), and Calamos Bitcoin 80 Series Structured Alt Protection ETF (CBTJ), offer investors downside protection ranging from 80% to 100%, with an upside cap rate of 10% to 55%. This protection is achieved through a combination of Treasuries and options on the CBOE Bitcoin US ETF Index.

Despite the growing interest in other cryptocurrencies, Calamos has no immediate plans to expand its offerings beyond bitcoin. According to Matt Kaufman, the head of ETFs at Calamos, the firm is not considering ethereum-based products at this time. Kaufman explained that ethereum does not meet Calamos' criteria for effective hedging due to its lack of liquidity and the absence of options on ethereum ETPs. He noted that if these conditions change in the future, Calamos may reconsider its stance on ethereum.

Calamos' decision to focus solely on bitcoin ETFs reflects a strategic approach to risk management. The firm's funds have already attracted over $100 million from investors, primarily financial advisors, indicating a strong demand for bitcoin products that offer downside protection. This strategy contrasts with other firms that have quickly expanded into ethereum and other cryptocurrencies after launching bitcoin products. For instance, BlackRock applied for a spot bitcoin ETF in June 2023 and followed up with an application for an ethereum ETF five months later.

Kaufman also emphasized that Calamos will not venture into meme coins, citing the firm's risk management philosophy. He believes that the recent surge in applications for meme coin ETFs underscores the importance of investor due diligence. Kaufman's comments highlight the firm's commitment to building products that are well-understood and reliable, rather than chasing trends or speculative assets.

In summary, Calamos' decision to stick with bitcoin ETFs as a safer bet reflects a cautious and strategic approach to the cryptocurrency market. The firm's focus on risk management and downside protection has resonated with investors, particularly financial advisors, who are seeking stable and reliable investment options in the volatile world of cryptocurrencies. By avoiding ethereum and meme coins, Calamos is positioning itself as a firm that prioritizes safety and reliability over speculative gains.