Latest developments: Calamos says its hedged Bitcoin ETFs are attracting inflows even as spot Bitcoin ETFs are seeing redemptions.
- Matt Kaufman, head of ETFs at Calamos, said the firm has seen about $10 million to $15 million in inflows over the past few weeks.
- Kaufman said advisers are increasingly looking for Bitcoin exposure that reduces volatility and downside risk.
- The firm offers three versions of its protected Bitcoin ETFs, including products with full downside protection and others with 10% or 20% downside risk.
- “You can get the upside of Bitcoin without the downside risk,” Kaufman said.
- Kaufman joined CoinDesk’s Jennifer Sanasie on public keys.
Here’s how it works: Calamos structures the products using government bonds and options linked to Bitcoin-linked indices.
- Kaufman said the firm allocates about 90% of assets to Treasuries to build downside protection.
- The remaining budget is used to buy Bitcoin-linked call spreads through FLEX options.
- Calamos created its own Bitcoin-linked index and listed FLEX options linked to this index after the launch of spot Bitcoin ETF options.
- The products are offered in quarterly structures as well as laddered versions designed for model portfolios.
What advisors ask: Asset managers are becoming more sophisticated in how they assess crypto exposure.
- Kaufman said advisers previously focused on whether Bitcoin even belonged in portfolios.
- Now advisors are asking how to improve risk-adjusted returns and portfolio construction using crypto exposure.
- Calamos positions its products as alternatives to traditional portfolio allocations, including broad stocks, bonds and cash.
- Kaufman said some investors are moving from cash-like products to fully hedged Bitcoin ETFs that are tied to Bitcoin performance but without downside exposure.
Reading between the lines: The crypto ETF market is evolving beyond simple spot exposure.
- Kaufman said the industry is increasingly dividing crypto ETF strategies into three categories: protection, income and growth.
- Calamos has previously launched automatically callable income ETFs and is exploring additional crypto-related strategies.
- Other ETF issuers have focused on generating returns from Bitcoin volatility through options-based products.
- “You don’t just sit in the vehicle anymore and ride out these waves,” Kaufman said.
What comes next: Calamos expects Bitcoin volatility to remain a defining feature of the asset.
- Kaufman said he expects Bitcoin to revisit previous highs despite recent market turbulence.
- He argued that Bitcoin’s volatility profile creates opportunities for structured products and option-based strategies.
- “I think we’re going higher,” Kaufman said.
