Key Takeaways
- • BlackRock filed with the SEC on October 19 for the iShares Bitcoin Managed Protection ETF (ticker PBIT), which would absorb roughly the first 10% of bitcoin losses in exchange for capping gains, according to Tokenist.
- • PBIT would be an options-based fund built on BlackRock's spot bitcoin ETF IBIT, buying calls near 90% of IBIT's value and selling higher-strike calls to fund the protection.
- • The fund is structured under the Investment Company Act of 1940, which could allow access to brokerage platforms and model portfolios that exclude grantor-trust bitcoin products like IBIT.
- • The fee has not yet been disclosed, and PBIT is not expected to launch before 2027, since new funds filed this way typically become effective 75 days after filing.
- • Peers Calamos, Innovator and FT Vest already run protected bitcoin funds; Calamos charges 0.79% annually versus IBIT's 0.25%, a cost that shows up in returns even when floors are not reached.
Summary
BlackRock's proposed iShares Bitcoin Managed Protection ETF, filed with the SEC on October 19 under the ticker PBIT, is designed to give investors bitcoin exposure with roughly the first 10% of losses absorbed, in exchange for a cap on gains. According to Tokenist, the fund targets advisers and cautious investors who want bitcoin in a portfolio without its full volatility. The fund is not yet trading and its fee has not been set. The filing comes as bitcoin trades near $81,700, about 35% below its October 2025 record, after falling as low as $57,800 in July.
Per the preliminary prospectus, PBIT will not hold bitcoin or bitcoin ETFs directly. Instead, it will buy call options on IBIT and similar products, sell higher-strike calls to offset costs, and hold the remainder in cash and short-term bonds. Positions are split into three overlapping tranches with start dates one month apart. Each tranche begins with bought calls near 90% of IBIT's value, implying a maximum loss of about 10% per tranche before fees. The sold calls cap gains, with the cap set when each tranche starts. The prospectus states the protection is not guaranteed, that investors "may lose some or all of their money," and that investors entering mid-tranche may receive a buffer different from 10%.
The product's structural appeal lies partly in its registration under the Investment Company Act of 1940, the framework governing mutual funds and most ETFs. IBIT is a grantor trust that holds bitcoin and sits outside that framework. Some brokerage platforms and model portfolios permit only 1940 Act funds, so PBIT could extend BlackRock's bitcoin exposure to channels IBIT cannot reach.
BlackRock is not the first mover. Calamos, Innovator and FT Vest already offer bitcoin funds with floors, and Calamos's laddered funds use a similar monthly structure. Per Tokenist, the capped funds performed as designed this year: investors in Calamos's 100% fund are flat year to date while bitcoin is down, whereas the uncapped 20% floor fund underperformed IBIT. Calamos charges 0.79% annually on its 100% and 90% laddered funds, more than three times IBIT's 0.25% fee, a cost that weighs on returns even when the floor is never reached.
PBIT is unlikely to launch before 2027, as new funds filed this way generally become effective 75 days after filing, pointing to early January at the earliest. BlackRock must still disclose the fee and the first tranche's cap. IBIT holds about $65 billion in assets and led roughly $1 billion of spot bitcoin ETF inflows earlier in the week, per the article. PBIT reflects BlackRock's bet that a distinct investor group wants bitcoin exposure but would accept capped upside in exchange for downside protection.
Per the preliminary prospectus, PBIT will not hold bitcoin or bitcoin ETFs directly. Instead, it will buy call options on IBIT and similar products, sell higher-strike calls to offset costs, and hold the remainder in cash and short-term bonds. Positions are split into three overlapping tranches with start dates one month apart. Each tranche begins with bought calls near 90% of IBIT's value, implying a maximum loss of about 10% per tranche before fees. The sold calls cap gains, with the cap set when each tranche starts. The prospectus states the protection is not guaranteed, that investors "may lose some or all of their money," and that investors entering mid-tranche may receive a buffer different from 10%.
The product's structural appeal lies partly in its registration under the Investment Company Act of 1940, the framework governing mutual funds and most ETFs. IBIT is a grantor trust that holds bitcoin and sits outside that framework. Some brokerage platforms and model portfolios permit only 1940 Act funds, so PBIT could extend BlackRock's bitcoin exposure to channels IBIT cannot reach.
BlackRock is not the first mover. Calamos, Innovator and FT Vest already offer bitcoin funds with floors, and Calamos's laddered funds use a similar monthly structure. Per Tokenist, the capped funds performed as designed this year: investors in Calamos's 100% fund are flat year to date while bitcoin is down, whereas the uncapped 20% floor fund underperformed IBIT. Calamos charges 0.79% annually on its 100% and 90% laddered funds, more than three times IBIT's 0.25% fee, a cost that weighs on returns even when the floor is never reached.
PBIT is unlikely to launch before 2027, as new funds filed this way generally become effective 75 days after filing, pointing to early January at the earliest. BlackRock must still disclose the fee and the first tranche's cap. IBIT holds about $65 billion in assets and led roughly $1 billion of spot bitcoin ETF inflows earlier in the week, per the article. PBIT reflects BlackRock's bet that a distinct investor group wants bitcoin exposure but would accept capped upside in exchange for downside protection.
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