BlackRock's proposed Bitcoin (BTC) fund would use options to seek some downside protection, but its filing leaves shareholders without a fixed limit on potential losses.
BlackRock's Oct. 19 filing amendment identifies the proposed fund as the iShares Bitcoin Managed Protection ETF and proposes PBIT as its ticker. It describes an options strategy tied to Bitcoin-linked exposure. EconoTimes previously covered the proposed fund's options strategy.
BlackRock warns that shareholders could lose their entire stake. In its illustration, a single options group begins with a purchased call struck at about 90% of the reference asset’s value, leaving roughly 10% initial exposure before costs; that example does not define losses for PBIT shareholders.
The filing gives the portfolio manager discretion over group count, strikes and expirations, so its illustrative setup does not set a defined outcome for PBIT shareholders.
Premiums from writing higher-strike calls would offset some purchased-option costs while limiting each group’s upside. Shareholders would bear expenses and any losses the options fail to cushion.
Rather than holding Bitcoin or Bitcoin exchange-traded products, PBIT would use options tied to BlackRock's iShares Bitcoin Trust ETF (IBIT) or comparable Bitcoin exposure. The trust reported $65.7 billion in net assets as of Oct. 19, according to iShares data.
The amendment names no management fee, exchange or launch date. It proposes that the registration become effective 75 days after filing.
