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Protected Bitcoin ETFs - Coggle Diagram
Protected Bitcoin ETFs
Every Protected Bitcoin ETF has a
one-year outcome period
a
defined window during which the protection and cap apply if you hold from day one to the end
.
When a client buys a protected Bitcoin ETF mid-outcome period, the
protection and cap math no longer work cleanly in their favor because
The cap has already been partially "used up" if Bitcoin has moved
If Bitcoin has fallen
since the outcome period started, the protection buffer has already been partially consumed — you're not getting full protection from where Bitcoin is today, only from the original starting level
If Bitcoin has risen
, you may be buying in near the cap, leaving little upside
"Fresher"
"freshness" is the right framework: you want to be close to the start of an outcome period, not buying into one mid-stream.
You buy with a A brand new cap rate set at current market conditions and a Full 100% protection from the new starting NAV on day one
Buying Mid-stream problems
Discount risk
no need to use that use exactly : that gap of whether Bitcoin went up or down
where the new mid-period buyer is getting less than the full intended deal
BTC went from 100$ to 80$
The protection is anchored to $100 (day one price) — so a new buyer at $80 has a $20 unprotected gap before the protection even kicks in. And the cap is also still at $110, so they get the full upside from $100 to $110... but first they need to climb $20 just to break even.
Bitcoin needs to climb up that 20$ and they just have to wait and hope Bitcoin recovers.
when BTC went down: Calamos ETF tool, protection at 100.83%
Current Floor shows +0.83%: That means the protection floor is actually above the current price right now. So a new buyer today would have:
Full 100% protection plus a tiny bit of extra cushion
they're actually in a slightly better position than a day-one buyer
when BTC down: increased cap Rate from 10% to 10.62%
Because Bitcoin went down, a new buyer today gets more upside to the cap than the day-one buyer did. The cap ceiling didn't move, but the current price is lower — so there's more room to run up to it.
BTS went from $100 to $108
Upside: only $2 remaining (from $108 to $110 cap)
Downside: $8 unprotected gap (from $108 down to the $100 protection anchor)
Cap
Buying on day 1 of outcome period
Cap rate
- locked
Downside protection
- locked