It’s been over a year and a half since spot bitcoin ETFs first came onto the market, but some advisors and investors have still chosen not to add bitcoin to their portfolio. However, conditions are starting to mount in favor of creating new first-time buyers to hop on the bitcoin train.
To begin, bitcoin had a relatively stable summer. For much of the season, bitcoin remained above the $100k price and even continued to approach new record highs. This era of relatively consistent price performance may help reduce fears of near-term volatility that uncertain investors tend to have.
Short-term price consistency isn’t the only condition working in favor of bitcoin right now. The federal government remains largely friendly towards cryptocurrency as a whole. Meanwhile, crypto legislation continues to be discussed at length in Congress, including plans for the U.S. Strategic Bitcoin Reserve. With crypto-friendly leadership at the helm, we believe the odds remain favorable that we could see some bills passed that further push bitcoin’s price to new highs.
In our opinion, this combination of near-term stability and long-term potential might create a new buy opportunity for first-time bitcoin investors. However, one making a first-time crypto investment might want to do so through a vehicle with a more fine-tuned risk profile.
For first-time bitcoin investors wary of risk, the Calamos Bitcoin Structured Alt Protection ETF – July (CBOY) may help. CBOY offers a level of downside risk management that is not necessarily present in many of the other bitcoin ETFs currently on the market.
After fees and expenses, CBOY will protect 100% of one’s investment across the fund’s one-year outcome period. This gives the fund a potent use case for advisors and investors who are concerned about potential price volatility within the asset class.
Meanwhile, the fund uses an options strategy to gain access to bitcoin’s price performance. However, these returns are subject to an upside cap.
CBOY’s standout strategy offers a resilient mix of offense and defense, which may be appealing to first-time bitcoin buyers if purchased at the beginning of the outcome period. The fund’s downside protection may help protect one’s initial investment if bitcoin does see a drawdown. Inversely, if bitcoin continues to rally due to favorable long-term factors, investors can still use CBOY to tap into attractive yearly return opportunities.
For more news, information, and strategy, visit the Crypto Content Hub.
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.
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.
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.
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.
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