Latest news: Calamos says its hedged Bitcoin ETFs are attracting inflows even as spot Bitcoin ETFs experience redemptions.
- Matt Kaufman, ETF director at Calamos, said the firm has received approximately $10 million to $15 million in inflows over the past few weeks.
- Kaufman said advisors are increasingly looking for 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 a 10% or 20% downside risk.
- “You can get upside from Bitcoin without downside risk,” Kaufman said.
- Kaufman joined CoinDesk’s Jennifer Sanasie at Public Keys.
How it works: Calamos structures the products using Treasury bonds and options linked to Bitcoin-linked indices.
- Kaufman said the firm allocates about 90% of assets to Treasuries to build downside protection.
- The remaining budget is used to purchase Bitcoin-linked call spreads through FLEX options.
- Calamos created its own Bitcoin-linked index and listed FLEX options linked to that index after the launch of spot Bitcoin ETF options.
- Products are offered in quarterly structures as well as tiered versions designed for model portfolios.
What advisors ask: Wealth managers are becoming more sophisticated in the way they assess cryptocurrency exposure.
- Kaufman said advisors previously focused on whether or not 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 broad stocks, bonds and cash.
- Kaufman said some investors are moving from cash-like products to fully hedged Bitcoin ETFs tied to Bitcoin performance but without exposure to the downside.
Reading 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 previously launched Automatically Recoverable Income ETFs and is exploring additional cryptocurrency-related strategies.
- Other ETF issuers have focused on generating returns from Bitcoin volatility through options-based products.
- “You no longer have to just sit in the vehicle and ride those waves,” Kaufman said.
What comes next: Calamos expects Bitcoin’s volatility to remain a defining characteristic of the asset.
- Kaufman said he expects Bitcoin to reach previous highs again despite the recent market turmoil.
- He argued that Bitcoin’s volatility profile creates opportunities for structured products and options-based strategies.
- “I think we’re going to go higher,” Kaufman said.
