iShares Proposes Bitcoin (BTC) Fund With Options-Based Downside Protection

An Oct. 19 filing by iShares Trust proposes a Bitcoin (BTC) fund that would combine exposure to the asset with options-based downside protection, while limiting potential gains. The proposed iShares Bitcoin Managed Protection ETF (PBIT) would use overlapping options tranches. Each tranche would typically begin with a protection level near 90% of its reference asset’s value when its options are acquired. That leaves about 10% initial loss exposure to the reference asset before fees and expenses; it is not a stated maximum-loss limit for PBIT investors. The filing says protection floors and upside caps can differ among tranches and change over time. PBIT would not invest directly in Bitcoin or Bitcoin exchange-traded products (ETPs). The fund remains a proposal, and its shares cannot yet be sold.

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