Are concerns over bitcoin facing a price downturn in 2025 finally starting to abate?
Following months of turbulent performance, the price of the digital currency seemed to be on the mend as April ended. The cryptocurrency has already started May on a high note, jumping nearly 30% compared to lows in early April.
With bitcoin’s price moving back to the green, conversations are restarting regarding whether the cryptocurrency will reach new highs in May. Keeping this in mind, some advisors and investors are now considering adding more bitcoin exposure to their portfolios.
While this rally bodes well for bitcoin investors, advisors shouldn’t be so quick to forget the past. These past few months have served as a crucial reminder for just how volatile the cryptocurrency’s price can become.
As such, it could pay off to approach bitcoin exposure in a more risk-conscious manner. One opportune method of doing so is through the use of a Calamos Protected Bitcoin ETF. These funds look to offer bitcoin exposure with a crucial blend of risk management.
CBTA Limits Risk While Offering Great Reward
The Calamos Bitcoin 80 Series Structured Alt Protection ETF – April (CBTA) is one of the latest Protected Bitcoin ETFs to launch from Calamos. This fund uses options on the Cboe Mini Bitcoin U.S. ETF Index to gain access to bitcoin’s price movements.
From there, the fund buys one-year zero coupon bonds to significantly limit the downside investors are exposed to. After fees and expenses, CBTA looks to lock investment losses at no more than 20% during its one-year outcome period.
This extensive downside security means the fund has a cap on potential returns. However, CBTA launched with an initial upside cap rate of 51.76%. This gives investors plenty of wiggle room for capturing attractive returns from bitcoin’s price performance.
Down the line, it will likely remain difficult to project whether bitcoin’s price will continue to rally or face more uncertainty. Regardless of what plays out, CBTA will be able to still blend strong bitcoin upside with a steady bulwark of risk management.
For more news, information, and analysis, visit the Crypto Channel.
Disclosure Information:
Before investing, carefully consider a Fund’s investment objectives, risks, charges and expenses. Please see the prospectus and summary prospectus containing this and other information which can be obtained by calling 1-866-363-9219. Read it carefully before investing.
The Funds seek to provide investment results that, before taking fees and expenses into account, track the positive price return of the CME CF Bitcoin Reference Rate – New York Variant (“BRRNY”) (“Spot bitcoin”) up to a predetermined upside cap (the “Cap”) while seeking to protect against 100%, 90% or 80%, respectively, of losses (before total fund operating fees and expenses) of Spot bitcoin over a period of approximately one (1) year (the “Outcome Period”). The Funds will not invest directly in bitcoin. Instead, the Funds seek to provide investment results that, before taking total fund operating fees and expenses into account, track the positive price return of Spot bitcoin by investing in options that reference the price performance of one or more underlying exchange-traded products (“Underlying ETPs”) which, in turn, own bitcoin and/or one or more indexes that are designed to track the price of bitcoin (“Bitcoin Index”).
The Target Outcome may not be achieved, and investors may lose some or all of their money. The Funds are designed to achieve the Target Outcome only if an investor buys on the first day of the Outcome Period and holds a Fund until the end of the Outcome Period. While the Funds seek to provide 100%, 90% or 80% protection against losses experienced by the price of Spot bitcoin for shareholders who hold Fund Shares for an entire Outcome Period, there is no guarantee a Fund will successfully do so. If a Fund’s NAV has increased significantly, a shareholder that purchases Fund Shares after the first day of an Outcome Period could lose their entire investment. An investment in the Funds is only appropriate for shareholders willing to bear those losses. There is no guarantee the Capital Protection and Cap will be successful, and a shareholder investing at the beginning of an Outcome Period could also lose their entire investment.
An investment in the Funds is subject to risks, and you could lose money on your investment in a Fund. There can be no assurance that a Fund will achieve its investment objective. Your investment in a Fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. The risks associated with an investment in a Fund can increase during times of significant market volatility. The Funds also have specific principal risks, which are described below. More detailed information regarding these risks can be found in the Funds’ prospectus.
Digital Assets Risk: The Bitcoin network was first launched in 2009 and bitcoins were the first cryptographic digital assets created to gain global adoption and critical mass. Although the Bitcoin network is the most established digital asset network, the Bitcoin network and other cryptographic and algorithmic protocols governing the issuance of digital assets represent a new and rapidly evolving industry that is subject to a variety of factors that are difficult to evaluate. Moreover, because digital assets, including bitcoin, have been in existence for a short period of time and are continuing to develop, there may be additional risks in the future that are impossible to predict as of the date of this prospectus. Digital assets represent a new and rapidly evolving industry, and the value of the Underlying ETPs’ shares depends on the acceptance of bitcoin. The realization of one or more of the following risks could materially adversely affect the value of the Underlying ETPs’ shares.
Investing involves risks. Loss of principal is possible. The Funds face numerous market trading risks, including authorized participation concentration risk, underlying ETP risk, cap change risk, capital protection risk, capped upside risk, cash holdings risk, concentration risk, clearing member default risk, correlation risk, costs of buying and selling fund shares, counterparty risk, derivatives risk, equity securities risk, FLEX options risk, interest rate risk, investment in a subsidiary, investment timing risk, liquidity risk, management risk, market maker risk, market risk, new fund risk, non-diversification risk, options risk, OTC options risk, position limits risk, premium-discount risk, secondary market trading risk, sector risk, tax risk, trading issues risk, U.S. Government security risk, U.S. Treasury risk, and valuation risk. For a detailed list of Fund risks see the prospectus.
100%, 90% or 80% capital protection is over a one-year period before fees and expenses. All caps are predetermined.
Cap Rate – Maximum percentage return an investor can achieve from an investment in a Fund if held over the Outcome Period.
Protection Level – Amount of protection a Fund is designed to achieve over the Days Remaining.
Outcome Period – Number of days in the Outcome Period.
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