A new exchange-traded fund (ETF) from global investment monitoring company Calamos, promising investors the volatility of Bitcoin’s value, hit the market on Wednesday.
CBOJ, the first of three ETFs, provides investors with 100% downside protection while offering 10% to 11.5% upside potential over a one-year period, according to a press release. A representative of Calamos told CoinDesk that as of 12:11 p.m. ET, the ETF traded roughly 635,714 shares.
The other two funds, CBXJ and CBTJ, scheduled to launch on Feb. 4, will offer 90% and 80% protection, respectively, with an upside capped at 28% to 30% and 50% to 55%.
The coverage opposed to the decrease is received thanks to the investments in expenses and characteristics of the US Treasury in the Bitcoin index. The construction ceiling is the established year and the era is restored the year with new conditions.
In undeniable terms, if an investor purchased ETF shares for one hundred dollars, Calamos would place a percentage of this sum in treasury expenses that would amount to one hundred dollars over a period of one year, ensuring that, whatever the value of bitcoin . At that point, the investor has all of the hundred dollars.
The rest is used to buy functions connected to the Bitcoin value, which allows you to obtain exposure to cryptocurrency without having it directly.
This safety blanket doesn’t come cheap, however. The management fee for the ETFs is set at 0.69%, higher than that of other ETFs that invest in bitcoin. The average fee for U.S.-based ETFs is about 0.51%, making these ETFs a bit expensive for investors. However, the higher price might be worth paying for investors looking for safety from the volatile digital assets market.
While the “Bitcoin Maxis” and other investors are building on the long-term price of Bitcoin, there are many those, in particular classic institutional investors, who are concerned about the volatility of the bitcoin and autumn periods in general.
A question that could arise from ETF mechanics is if it would compete with convertible Microstrategy (MSTR) bonds, since any of them would offer some protection against the problem. However, according to Coendesk Analyst James Vanstraten, this is not the case. Mstr’s grades differ from those of the ETF of calamos in which they do not have a bullish potential limit. If certain criteria are fulfilled, they become actions, which generates a potentially greater risk but greater bullish potential.
Downside protective ETFs have been a popular innovation among issuers in recent months, leading to the inauguration of crypto-friendly President Donald Trump. This has led to hopes that many of those ETF applications will gain approval from the new Securities and Exchange Commission.
The crypto asset manager reviewed Bit 3 of its futures-founded crypto ETFs in October to get the exposure to Treasuries to protect Crypto that is worth it. The funds will rotate between making an investment in crypto and Treasuries based on market signals.
Helene is a New York -based news reporter in COINDESK and covers news about Wall Street, the increase in the budget quoted in the bag (ETF) of Bitcoins in cash and updates on encryption exchanges. She is also co -sided with the Markets Daily of Coindesk on Spotify and YouTube. Helene recently graduated from the Economic and Commercial Reports Program of the University of New York and has worked at CBS News, Yahoofinance and Nasdaq TradeTalks. It has BTC and ETH.
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