Calamos Launches Bitcoin Protection ETFs with Defined Downside and Upside Caps

Executive Summary

Calamos Investments LLC introduced three new Bitcoin Protection Exchange-Traded Funds (ETFs) on October 8, 2025: Calamos Bitcoin Structured Alt Protection ETF® – October (CBOO), Calamos Bitcoin 90 Series Structured Alt Protection ETF® – October (CBXO), and Calamos Bitcoin 80 Series Structured Alt Protection ETF® – October (CBTO). These funds are designed to offer investors exposure to Bitcoin's price movements with pre-defined downside protection and capped upside potential over a one-year outcome period, aiming to integrate digital asset investment with traditional risk management frameworks.

The Event in Detail

The newly launched Calamos ETFs provide varying levels of downside protection. CBOO offers 100% downside protection with an initial cap rate of 8.47%. CBXO provides 90% downside protection and an initial cap rate of 23.43%. CBTO is structured with 80% downside protection and an initial cap rate of 41.62%. These cap rates represent the maximum percentage return an investor can achieve from an investment if held over the outcome period, before fees and expenses. The expense ratio for CBOO is 0.69% as of its prospectus date. The ETFs are managed by Co-CIO Eli Pars and the Alternatives Team. Unlike spot Bitcoin ETFs that directly hold Bitcoin, these Calamos products do not invest directly in the cryptocurrency. Instead, they utilize options referencing the CME CF Bitcoin Reference Rate – New York Variant (BRRNY) or other underlying Exchange-Traded Products (ETPs) and Bitcoin Indexes to achieve their target outcomes. The structured protection ETFs are designed to reset annually, offering a new upside cap with refreshed protection against negative returns of the benchmark over the subsequent 12-month period.

Business Strategy & Market Positioning

Calamos's strategy with these new ETFs is to bridge the gap between traditional finance and digital assets by offering products that mitigate the inherent volatility of Bitcoin. By providing defined downside protection levels, Calamos targets a segment of investors who seek exposure to Bitcoin's growth potential but are risk-averse or operate under mandates that preclude direct, unprotected cryptocurrency investments. This approach contrasts with typical spot Bitcoin ETFs, which directly hold Bitcoin and are subject to its full price fluctuations, and futures-based ETFs, which invest in futures contracts. While spot ETFs often have lower expense ratios (e.g., 0.20-0.25% for many leading funds like iShares Bitcoin Trust (IBIT) and Fidelity Wise Origin Bitcoin Fund (FBTC)), futures ETFs like ProShares Bitcoin Strategy ETF (BITO) can have higher fees (around 0.95%) due to rollover costs. The Calamos offerings, with their explicit protection levels and capped returns, represent a distinct alternative, prioritizing risk management over maximizing uncapped upside, thereby appealing to a different investor demographic.

Market Implications

The introduction of Calamos's Bitcoin Protection ETFs signifies an evolving landscape in the integration of digital assets into mainstream financial products. Short-term, these products have the potential to attract a new cohort of institutional and traditional retail investors who prioritize risk mitigation, thereby increasing capital flow into the Bitcoin ecosystem through regulated and structured vehicles. Long-term, this could pave the way for more sophisticated and protected crypto investment products, further integrating digital assets into traditional finance. This trend is part of a broader movement towards institutional adoption of Bitcoin, evidenced by the over $143 billion in assets under management by US spot Bitcoin ETFs within 18 months of their approval. The increased availability of such regulated products is observed to contribute to Bitcoin's reduced volatility, with 30-day rolling volatility decreasing significantly, making it comparable to traditional assets like the S&P 500 and gold. This development reinforces the narrative of Bitcoin transitioning from a volatile speculative asset to a more stable store of value within professional investment portfolios.

Broader Context

The launch of these structured protection ETFs by Calamos aligns with the increasing regulatory clarity and institutional acceptance within the digital asset space. With the EU's Markets in Crypto-Assets Regulation (MiCAR) fully operational and the Basel Committee's standards for crypto assets implementation set for January 2026, the global regulatory environment is becoming more defined. This clarity encourages traditional financial firms to innovate and offer more diverse crypto-linked products. The ability to invest in Bitcoin through a product with defined risk parameters allows for broader participation without the technical complexities or direct exposure to extreme market swings. This evolution facilitates the allocation of capital from investment advisers, pension funds, and other professional asset managers, contributing to Bitcoin's growing legitimacy and entrenchment within the global financial infrastructure. The trend suggests that the crypto industry is moving from an era of regulatory uncertainty to one of structured innovation and strategic growth, driven by products that balance investor protection with opportunities for digital asset exposure.

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[1] Calamos Announces Upside Cap Rates with Defined Downside Protection for Bitcoin Protection ETFs - CryptoCurrencyNews (https://cryptocurrencynews.com/crypto/calamos ...)[2] Calamos Announces Upside Cap Rates with Defined Downside Protection for Bitcoin Protection ETFs - PR Newswire (https://vertexaisearch.cloud.google.com/groun ...)[3] Calamos Protected Bitcoin ETFs (https://vertexaisearch.cloud.google.com/groun ...)

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