Bitcoin at one point fell as much as 52% from its record high of roughly $126,000. Over that stretch, the Calamos Bitcoin Structured Alt Protection ETF – October (CBOO), a protected bitcoin fund from U.S. asset manager Calamos, lost just 1% after its one-year protection period began in October 2025 (as reported on Oct. 20). Then on Oct. 19, BlackRock, the world's largest asset manager, filed for a similar fund, PBIT, with the U.S. Securities and Exchange Commission (SEC, the U.S. stock market regulator).
Most people read the news as "BlackRock's third bitcoin ETF." A fund that limits losses also sounds like a better deal than simply buying bitcoin.
But the real story is the price. These funds pay for protection by earning less when bitcoin goes up.
- Where did the fund that lost only 1% keep its money?
Calamos puts roughly 90% of the fund's assets into U.S. Treasuries (bonds the U.S. government issues when it borrows money). It uses the rest to buy bitcoin-linked options (the right to buy or sell at a set price).
When bitcoin rises, the options make money. Put simply, when bitcoin falls, it is the options that lose value, while most of the money sits in Treasuries. That is why the fund lost only 1% in a year when bitcoin came close to halving.
Think of it like keeping most of your savings in a bank deposit and spending roughly the interest on lottery tickets. Unlike a lottery ticket, though, an option's value depends on how far bitcoin rises.
- The price was an 8.47% cap on a year's gains
For its first year (Oct. 7, 2025, to Oct. 6, 2026), CBOO aimed to shield investors from 100% of losses, and in return capped the most they could earn at 8.47% (before fees). Both the protection and the cap are before fees, and neither is guaranteed. That ceiling is called the cap: the maximum return an investor can get over the period. When a year ends, a new period begins and the cap is set again.
Its sister funds, launched the same day, make the trade-off clearer. The fund where investors bear losses of up to 10% had a cap of 23.43%; the one with losses of up to 20% had a cap of 41.62%. The less loss a fund absorbs for you, the higher its cap.
Here is how it works with $10,000 (a hypothetical, before fees). If bitcoin rises 50% in a year, someone who bought bitcoin directly makes $5,000, but CBOO stops at about $847. If bitcoin instead falls 30%, the direct buyer loses $3,000, while CBOO aims to keep the original amount intact for anyone who held from the first day of the period. On top of that, CBOO charges 0.69% a year, about $69, according to its 2025 prospectus.
In plain terms, it protects you in a year of big losses and hands most of the gains to someone else in a year of big rallies.
- How is BlackRock's PBIT designed differently?
PBIT does not hold bitcoin directly. It uses options linked to BlackRock's spot bitcoin ETF (IBIT, a fund that actually buys and stores bitcoin). It buys IBIT call options (options that gain when the price rises) and sells higher-priced calls to help cover the cost.
It runs three overlapping sets of options, starting a new one each month. The filing says each set typically aims to limit initial losses to about 10% (before fees). In other words, it does not block every loss. And because the starting level, floor and cap are not fixed, investors could lose more than that. The cap is set by market conditions when each set starts, and the fee has not been filled in yet.
The difference ties into when you buy. Calamos says its protection fully applies only if you hold shares from the first day of the one-year period to the last. If you buy partway through, especially after the fund's value has risen sharply, it warns you may not get the protection and could lose your entire investment.
- The day BlackRock filed, IBIT drew its biggest daily inflow in a year
On Oct. 19, IBIT took in $665.2 million in a single day, its largest daily inflow since Oct. 7, 2025. With $66.37 billion in net assets, IBIT is the largest U.S. spot bitcoin ETF.
Over the previous two weeks, U.S. spot bitcoin ETFs as a group had lost about $910 million in outflows. That day, bitcoin stayed between $82,000 and $83,000.
BlackRock is not the first to offer a protected bitcoin ETF. Calamos, First Trust and Innovator already sell them. But because the filing comes from the company with the biggest bitcoin ETF, the option to "invest in bitcoin while losing only a little" could become more widely available. The fund has not been approved yet, so its launch date and terms are not set.
- BITPRESS Insight
CBOO's 1% was not free. In return for aiming to block every loss, it capped a year's gains at 8.47%, and funds that block less have caps of 23.43% and 41.62%. In a year like the last one, when bitcoin roughly halved, the trade shines. In a year of big gains, you miss most of bitcoin's upside.
So it is a mistake to see these funds as "a better bitcoin." They are a way to hold the same bitcoin on different terms.
The first question is whether you could stomach bitcoin falling by half. If you could, the cap is gains you give up. If you could not, the cap is your insurance premium. The test is not "how high could it go?" but "how much can I afford to lose?"
Sources
https://www.coindesk.com/markets/2026/10/20/blackrock-seeks-to-shield-bitcoin-investors-from-losses-after-rival-fund-weathers-50-crash
https://decrypt.co/381385/blackrock-files-for-buffer-bitcoin-etf-as-ibit-draws-665m-in-a-day
https://cointelegraph.com/news/blackrock-ishares-bitcoin-managed-protection-etf-pbit
https://www.theblock.co/news/markets/2026-10-20-blackrock-ibit-bitcoin-etf-665-million-421102
https://www.calamos.com/globalassets/media/documents/news-releases/2025/cboo-cbxo-cbto-cap-rate-press-release.pdf
https://www.calamos.com/funds/etf/structured-protection/
Glossary
ETF — A fund that trades on the stock market like a share; a bitcoin ETF moves with the price of bitcoin.
US Treasuries — Bonds the U.S. government issues when it borrows money, considered one of the safest assets.
Options — The right to buy or sell an asset at a set price within a set period.
Cap — The maximum return a protected ETF can pay investors over a set period.
Spot Bitcoin ETF — An ETF that actually buys and stores bitcoin and moves with its price.
BITPRESS articles are information to help your investment decisions, not a recommendation to buy or sell any stock or coin. Investment decisions and their results are your own responsibility.
