Calamos Launches First-Ever 100% Downside Protected Bitcoin ETF, Debuts Jan. 22 

The announcement suggests an imminent launch of a Bitcoin exchange-traded fund (ETF) offering full downside protection. Scheduled to debut on January 22, 2025, on the Chicago Board Options Exchange (CBOE), the ETF, trading under the ticker CBOJ, promises a revolutionary approach to addressing Bitcoin’s notorious volatility.

The CBOJ ETF blends U.S. Treasury bonds with options tied to the CBOE Bitcoin US ETF Index. This unique structure allows investors to gain exposure to Bitcoin while mitigating the high risks typically associated with the cryptocurrency. Unlike traditional ETFs, CBOJ resets its downside protection annually, ensuring investors enjoy a fresh cap on potential gains every year while being shielded from losses.

“Many investors have been hesitant to invest in bitcoin due to its epic volatility. Calamos seeks to meet advisor, institutional, and investor demands for solutions that capture Bitcoin’s growth potential while mitigating the historically high volatility and drawdowns,” said Matt Kaufman, Head of ETFs at Calamos.

The introduction of CBOJ is part of a broader trend where financial institutions aim to bridge the gap between traditional investing and cryptocurrency. Defined outcome products, such as buffer funds, have gained traction recently, especially after the 2022 market downturn, which saw simultaneous declines in stocks and bonds. By integrating strategies similar to equity ETFs, CBOJ is setting a precedent for crypto investments.

Reports suggest that structured Bitcoin ETFs are gaining momentum. Spot Bitcoin funds launched in January 2024 witnessed an extraordinary debut, attracting billions of dollars in inflows. That surge helped push Bitcoin’s value to a record high of over $100,000. The iShares Bitcoin Trust ETF (IBIT), the most prominent among those funds, now boasts over $50 billion in total assets.

Despite this success, financial advisors have largely remained cautious. Kaufman noted that Bitcoin’s history of price swings continues to deter many professionals. “For folks looking to access that space, they want to do so in a risk-managed framework or something that makes a little more sense for their portfolio,” he explained.

Unlike traditional Bitcoin ETFs, CBOJ’s annual reset ensures that investors remain protected year after year. Each year’s upside cap will be determined based on options pricing, with the first set to be finalized on January 22, 2025. The holding period for the fund will span from January 22, 2025, to January 31, 2026.

Source: Calamos Investments

This protective structure appeals to risk-averse investors who wish to explore the crypto space without exposing their portfolios to Bitcoin’s unpredictable price swings. By combining Bitcoin options with the stability of U.S. Treasury holdings, CBOJ offers a balanced approach to crypto investment.

Source: Calamos Investments

“Calamos is targeting a specific group of investors—those who want exposure to Bitcoin’s growth but also value downside protection,” said Kaufman. His team envisions CBOJ being held alongside pure-play Bitcoin ETFs, creating a diversified investment strategy.

Calamos is not alone in this pursuit. Innovator and First Trust are among other ETF managers seeking to combine crypto exposure with innovative strategies. Several firms, including Grayscale and Roundhill, have proposed income-generating Bitcoin funds, such as covered call ETFs. As cryptocurrency regulations evolve, more funds are expected to hit the market throughout 2025.

President-elect Donald Trump’s incoming administration is anticipated to take a friendlier stance toward crypto, potentially paving the way for more crypto-focused ETFs. Under new leadership, the Securities and Exchange Commission (SEC) could play a significant role in accelerating filings and approvals.

While the CBOJ ETF marks a major milestone, it also represents a step forward for an industry striving to make cryptocurrency more accessible to mainstream investors. Calamos’ move is likely to influence other players in the market, encouraging further innovation in the rapidly evolving crypto-ETF landscape.

Bitcoin and Crypto ETFs and investment products are expected to perform well in 2025 under the more crypto-friendly Trump administration. 2025 price predictions for XRP and even meme coins such as Dogecoin remain bullish.