Representing a fundamental shift in how people store and assess wealth, Bitcoin (CCC:BTC-USD) and the broader cryptocurrency ecosystem has upended the financial paradigm. More than fifteen years ago, when BTC made its public debut, hardly anyone knew anything about decentralized digital assets. Today, cryptos have become a cornerstone of innovation-centric portfolios, with financial services provider Calamos Investments aiming to offer a fresh rethink.
It’s no exaggeration to say that cryptos have reshaped the financial landscape. Last year, data from Bank of America Private Bank revealed that millennial investors aged 21 to 43 who have at least $3 million are taking an unconventional approach to the blockchain. Specifically, the average portfolio exposure to these financial instruments among self-identified conservative investors stands at a lofty 17%.
Such normalization of risk flies in the face of traditional investment wisdom, where conservative exposure typically entails generous portions of stable assets like bonds and blue-chip dividend stocks. Given the anti-establishment nature of crypto investing, the literature of what is considered acceptable risk could fluctuate significantly in the future.
Still, investors who partake in the crypto journey cannot overcome a simple fact: Bitcoin is prone to wild volatility. Current events alone make that clear; recently, the Federal Reserve elected to keep interest rates unchanged, snapping a streak of three consecutive rate cuts that began in September. At the same time, during a press conference, Federal Reserve chair Jerome Powell delivered bullish commentary on cryptos, giving praise for ongoing efforts to provide regulatory clarity for the blockchain ecosystem. With this relatively simple act, Bitcoin — which just a few days prior conspicuously slipped below the six-digit price threshold — screamed higher, reclaiming the $104,000 mark.
That was just one incident. History is replete with examples of flash crashes and secular implosions that have both attracted people to, and repulsed others away from cryptocurrencies. Many are seeking an alternative mechanism to Bitcoin, one that buffs out its rough edges — a solution that Calamos’ hopes falls under its purview.
Calamos ETF Products: Striving To Integrate Innovation With Familiarity
Materializing concurrently with soaring interest in Bitcoin and other cryptos is the rise of the exchange-traded fund. Typically providing a basket of securities, ETFs have become attractive to some everyday investors for their simplicity and efficacy. The proof is in the numbers.
According to Statista, the value of assets undergirding global ETFs landed at only $204.3 billion in 2003. Two decades later, this metric skyrocketed to over $11.5 trillion. Today, it’s not at all uncommon to see ETFs cover various sectors and even investment strategies. Some funds simply cover one security.
Within this diverse arena stands Bitcoin ETFs — and to expectations, the category has enjoyed a lot of success. During the debut of the first BTC-focused funds, the financial vehicles saw tens of millions of shares (technically “units” of the fund) change hands. The combined trading volumes soared into the billions, demonstrating the popularity of virtual currencies.
However, even on Wall Street proper, critics have noted that the journey within the ETF realm has been as volatile as the crypto market itself. What many investors have sought in response to these wild pricing dynamics is an alternative mechanism to Bitcoin — one that aligns with BTC’s growth potential while also providing the mitigatory frameworks common in advanced equity-trading strategies.
That’s where Calamos may come in, with a portfolio of innovative products called the Calamos Protected Bitcoin ETF Suite. Earlier, the financial services provider generated waves by offering the Calamos Bitcoin Structured Alt Protection ETF. Listed on the Chicago Board Options Exchange (CBOE), the fund — which features the ticker symbol CBOJ — represents the world’s first 100% downside protected Bitcoin ETF.
Thanks to a combination of government-backed bonds and financial derivatives, the actively managed CBOJ fund offers a regulated mechanism to access Bitcoin within a risk-controlled framework. Essentially, the management team overseeing CBOJ does the heavy lifting for investors, allowing them to ride Bitcoin’s gains while also potentially receiving the benefits of skilled evasive action during periods of volatility.
Expanding The Suite: CBXJ And CBTJ
Building on the foundation laid by CBOJ, Calamos is now expanding its Protected Bitcoin ETF Suite with two new funds: CBXJ and CBTJ. These ETFs introduce a tiered approach to Bitcoin investing, allowing market participants to choose the level of downside protection that aligns with their risk tolerance and financial …
Full story available on Benzinga.com