CandleFocus

Asset managers in US propose new Bitcoin ETFs to target cautious investors

Author: Content Editor
Asset managers are seeking approval from the U.S. Securities and Exchange Commission (SEC) to launch new Bitcoin exchange-traded funds (ETFs) that use derivatives to minimize potential losses. These ETFs aim to attract cautious investors by offering downside protection and reducing risks associated with the volatility of Bitcoin. The proposed strategies include buffered and managed floor strategies, which limit potential profits but protect against losses. Firms such as Calamos Investments, First Trust Portfolios, Innovator ETFs, and Grayscale Investments are among those seeking approval for these new products. If approved, the ETFs could launch as early as February. The move comes as investors are attracted to the crypto market due to the significant rise in Bitcoin's price, and the new ETFs will enable more people to add Bitcoin exposure to their portfolios in a risk-aware manner. However, the funds may face challenges due to position limits on options contracts if demand exceeds capacity. This development follows a significant shift in the ETF market, with Ethereum spot ETFs recording higher inflows than Bitcoin ETFs for the first time.

Related News