Latest developments: Calamos says its hedged Bitcoin ETFs are attracting inflows even as 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 in recent weeks.
- Kaufman said advisors are increasingly seeking exposure to Bitcoin that reduces volatility and downside risk.
- The company offers three versions of its hedged Bitcoin ETFs, including products with full downside protection and others with 10 or 20 percent downside risk.
- “You can profit from Bitcoin without downside risk,” Kaufman said.
- Kaufman joined CoinDesk’s Jennifer Sanasie on public keys.
How it works: Calamos structures the products using Treasury bills and options linked to Bitcoin-related indices.
- Kaufman said the company allocates about 90% of its assets to Treasuries to create downside protection.
- The remaining budget is used to purchase Bitcoin-related call spreads via FLEX options.
- Calamos created its own Bitcoin-linked index and listed FLEX options linked to that index after launching Bitcoin ETF spot options.
- Products are offered in quarterly structures as well as laddered versions designed for model portfolios.
What advisors ask: Wealth managers are becoming more sophisticated in how they assess exposure to cryptocurrencies.
- Kaufman said advisors previously focused on whether Bitcoin belonged in wallets.
- Now, advisors are wondering how to improve risk-adjusted returns and portfolio construction using cryptocurrency exposure.
- Calamos positions its products as alternatives to traditional portfolio allocations, including stocks, bonds and cash.
- Kaufman said some investors are moving away from cash-like products and toward fully hedged Bitcoin ETFs, tied to Bitcoin’s performance but without downside exposure.
Read between the lines: The crypto ETF market is evolving beyond simple spot exposure.
- Kaufman said the industry is increasingly dividing crypto-ETF strategies into three categories: protection, income and growth.
- Calamos has previously launched auto-callable income ETFs and is exploring other crypto-related strategies.
- Other ETF issuers have focused on generating yield from Bitcoin volatility through options-based products.
- “You don’t have to sit in the vehicle and ride those waves anymore,” Kaufman said.
What comes next: Calamos expects Bitcoin’s volatility to remain a defining characteristic of the asset.
- Kaufman said he expects Bitcoin to return to its previous highs despite recent market turmoil.
- He argued that Bitcoin’s volatility profile creates opportunities for structured products and options-based strategies.
- “I think we’re going higher,” Kaufman said.
