Protecting Your Wealth in the Crypto Space
As the popularity of bitcoin continues to soar, investors are seeking ways to tap into its potential while minimizing risk. Calamos Investments is set to launch a game-changing ETF that offers 100% downside protection on bitcoin investing, providing a unique opportunity for financial advisors and investors alike.
A Proven Track Record
Calamos has already seen significant success with its suite of exchange-traded funds that offer 100% downside protection on major indices such as the S&P 500, Russell 2000, and Nasdaq Composite. Since launching last May, these buffered strategies have attracted over $500 million in investments. Building on this momentum, the firm is now turning its attention to the crypto space.
Addressing Investor Concerns
According to Matt Kaufman, head of ETFs at Calamos, many investors are drawn to bitcoin’s potential but are hesitant due to concerns about risk. “People have seen the potential of bitcoin, but a lot of them are worried about the risk,” he notes. The new Calamos Bitcoin Structured Alt Protection ETF (CBOJ) aims to alleviate these concerns by providing a chance to participate in the crypto market while preserving wealth.
How it Works
The CBOJ ETF offers 100% downside protection, gross of a 0.68% expense ratio, in exchange for a cap on upside performance. While the specific cap will be announced closer to the January 22 launch, Kaufman expects it to be in the 10% range over the 12-month outcome period. This strategy allows investors to tiptoe into the crypto space while protecting a portion of their downside.
A Conservative Approach
Financial advisors are likely to be drawn to CBOJ as a way to help clients diversify their portfolios into the crypto space. By blending the 100% downside protection with a spot bitcoin ETF, investors can increase their upside potential while maintaining a level of protection. Stuart Chaussee, founder of Stuart Chaussee & Associates, describes the new Calamos strategy as a “fascinating offering” that may encourage advisors and investors to reconsider the crypto space.
Future Plans
Calamos is also planning to introduce buffer strategies that limit bitcoin losses over 12 months to 10% and 20%. With massive adoption of spot bitcoin ETFs already underway, Kaufman believes there is significant demand for risk-adjusted access to bitcoin. “We saw massive adoption of spot bitcoin ETFs, and I think there’s a lot of money on the sidelines looking to access bitcoin but in a more risk-adjusted way,” he notes.
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