latest developments: Calamos says its protected Bitcoin ETFs are attracting inflows, while spot Bitcoin ETFs are seeing redemptions.
- Matt Kaufman, head of ETFs at Calamos, said the firm has seen inflows of about $10 million to $15 million over the past several weeks.
- Kauffman said advisors are increasingly looking for Bitcoin exposure that minimizes volatility and downside risk.
- The company offers three versions of its protected Bitcoin ETF, including a product with full downside protection and another with 10% or 20% downside risk.
- “You can get the benefits of Bitcoin without any of the downside risk,” Kaufman said.
- Kaufman joins CoinDesk’s Jennifer Sanasi on public keys.
how it works: Calamos structures products using treasuries and options linked to a Bitcoin-linked index.
- Kauffman said the company allocates about 90% of its assets to Treasuries to create downside protection.
- The remaining budget is used to purchase Bitcoin-linked call spreads through flex options.
- Calamos created its own Bitcoin-linked index and listed flex options linked to that index following the launch of spot Bitcoin ETF options.
- Products are offered in stepped versions designed for quarterly structures as well as model portfolios.
What consultants are asking: Wealth managers are becoming more sophisticated in the way they evaluate crypto exposure.
- Kaufman said advisers had previously focused on whether the portfolio included bitcoin.
- Now, advisors are asking how to improve risk-adjusted returns and portfolio construction using crypto exposure.
- Calamos positions its products as an alternative to traditional portfolio allocations including broad equities, bonds and cash.
- Kaufman said some investors are moving from cash-like products to fully protected Bitcoin ETFs tied to Bitcoin performance, but without the downside risk.
Reading between the lines: The crypto ETF market is evolving beyond simple spot exposure.
- Kauffman said the industry is increasingly dividing crypto ETF strategies into three categories: safety, income and growth.
- Calamos previously launched an auto-callable income ETF and is exploring additional crypto-related strategies.
- Other ETF issuers have focused on generating yield from Bitcoin’s volatility through options-based products.
- “You no longer have to just hop in a spot vehicle and ride out those waves,” Kauffman said.
what comes next: Kalamos expects Bitcoin’s volatility to remain a defining characteristic of the asset.
- Kaufman said he expects Bitcoin to recapture previous highs despite the recent market turmoil.
- He argued that Bitcoin’s volatility profile creates opportunities for structured products and options-based strategies.
- “I think we’re going to go higher,” Coffman said.