From Decrypt · By Decrypt Agent
In brief
BlackRock has filed for the iShares Bitcoin Managed Protection ETF, a "buffer" fund that would trade under the ticker PBIT.
The fund would buy and sell options on IBIT and similar bitcoin exposure, typically limiting each tranche's initial losses to about 10% while capping gains.
IBIT drew $665.2 million on Monday, the only one of 12 U.S. spot Bitcoin ETFs to post net inflows, according to SoSoValue.
BlackRock has filed to launch a "buffer" Bitcoin ETF that would cap investors' gains in exchange for limiting their losses, according to a filing with the Securities and Exchange Commission on Monday.
The iShares Bitcoin Managed Protection ETF, which would trade under the ticker PBIT, "seeks to provide upside exposure to the iShares Bitcoin Trust ETF (IBIT) and/or similar bitcoin exposure up to an approximate limit, while seeking to provide a level of downside protection," the filing says. The management fee has not yet been filled in.
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Each tranche's protection typically starts at about 90% of the reference asset's value, limiting its initial losses to roughly 10% before fees, according to the filing. The cap on gains is set by market conditions at the start of each tranche, and the fund has broad discretion to change both, so investors should not expect a fixed outcome.
The fund would be registered under the Investment Company Act of 1940, the law that governs most mutual funds and ETFs, as part of the iShares Trust. It is BlackRock's third Bitcoin ETF filing, Bloomberg Intelligence analyst James Seyffart noted, and the asset manager still offers crypto products only for Bitcoin and Ethereum.
Buffered Bitcoin ETFs are not new. Calamos, First Trust and Innovator already offer defined-outcome funds tied to Bitcoin, but Seyffart said that when BlackRock moves in this space, it "tends to make a big splash."
BREAKING🚨 @BlackRock just filed for another Bitcoin ETF. This one will be a "buffer" Bitcoin ETF which will means it will offer downside protection but investors will give up some upside to get that protection. Ticker will be $PBIT. pic.twitter.com/302iMwn2fR