In a notable shift within the cryptocurrency investment landscape, Calamos Investments reports a surge in interest for its protected Bitcoin exchange-traded funds (ETFs) even as over $1 billion was withdrawn from spot Bitcoin ETFs last week. The firm attributes this trend to investors seeking Bitcoin exposure that mitigates volatility and downside risk.
Matt Kaufman, head of ETFs at Calamos, shared that the firm experienced inflows of approximately $10 million to $15 million in recent weeks. He emphasized that financial advisors are increasingly looking for ways to incorporate Bitcoin into portfolios while minimizing potential losses.
Calamos offers three variations of its protected Bitcoin ETFs, which include options with full downside protection and those that limit downside risk to 10% or 20%. “You can get upside of Bitcoin with no downside risk,” Kaufman stated during an interview with CoinDesk’s Jennifer Sanasie on the Public Keys podcast.
The structure of these ETFs involves a strategic allocation of assets, with about 90% invested in U.S. Treasuries to provide a safety net. The remaining funds are utilized to purchase Bitcoin-linked call spreads through FLEX options. Following the introduction of spot Bitcoin ETF options, Calamos developed its own Bitcoin-linked index and associated FLEX options.
As wealth managers become more adept at assessing crypto investments, Kaufman noted a shift in their inquiries. While the initial focus was on whether Bitcoin should be included in portfolios, advisors are now concentrating on enhancing risk-adjusted returns and optimizing portfolio construction with crypto assets. Calamos positions its products as alternatives to traditional investments, such as equities, bonds, and cash.
Some investors are transitioning from cash-like products to fully protected Bitcoin ETFs that are linked to Bitcoin’s performance but shielded from downside exposure. Kaufman explained that the crypto ETF market is evolving, with strategies increasingly categorized into protection, income, and growth.
Looking ahead, Kaufman anticipates that Bitcoin’s volatility will continue to be a significant characteristic of the asset. He expressed confidence that Bitcoin could reach previous highs despite the current market fluctuations, suggesting that its volatility presents opportunities for structured products and options-based strategies. “I think we’re going higher,” Kaufman concluded.
Calamos Investments reports a significant influx into its protected Bitcoin ETFs, contrasting with substantial withdrawals from spot Bitcoin ETFs. This trend reflects a growing demand among investors for Bitcoin exposure that minimizes risk, as wealth managers seek to enhance portfolio stability.