On December 2nd, COINOTAG News reported that four notable asset management firms have taken significant steps by applying to the US regulatory agency for the creation of a Bitcoin investment ETF. These innovative ETFs are designed to employ derivatives to mitigate or entirely negate potential losses, catering to investors wary of Bitcoin’s notorious volatility. Todd Rosenbluth, research director at consulting firm TMX VettaFi, highlighted that the substantial rise in Bitcoin’s value this year may leave investors feeling regretful for missing out. The introduction of downside-protected ETFs will facilitate a wider audience in incorporating Bitcoin into their investment strategies with a greater sense of risk management.
Among these proposals, Calamos Investments is seeking approval for four managed ETFs, while First Trust Portfolios is aiming for a 15% on-exchange ETF alongside a buffer ETF that safeguards against initial losses of up to 30%. Innovator ETFs is also in the mix, proposing a 10% buffer product with three-month operation and a separate 20% managed ETF with a unique “participation rate.” Notably, Grayscale Investments is preparing to unveil a covered call Bitcoin ETF, which will strategically sell call options on the spot Bitcoin ETF, offering a steady stream of premium income even amidst potential price appreciation constraints.