The world of exchange-traded funds (ETFs) is evolving rapidly, and 2025 is set to usher in a new wave of innovative financial products that blend bitcoin exposure with sophisticated derivatives strategies. Following the massive success of spot bitcoin ETFs in 2024—which collectively attracted tens of billions of dollars and helped propel bitcoin to record highs above $100,000—asset managers are now exploring hybrid models that offer both upside potential and risk mitigation.
One of the most anticipated launches is the Calamos structured protection ETF, designed to provide investors with 100% downside protection while still allowing participation in bitcoin’s growth. This fund, set to trade under the ticker CBOJ, represents a significant step forward in making crypto investing more accessible to conservative portfolios and financial advisors wary of volatility.
How the Calamos Bitcoin Protection ETF Works
The Calamos fund operates on a defined outcome model, combining options exposure on the Cboe Bitcoin U.S. ETF Index with U.S. Treasury holdings. It’s structured for a fixed 12-month holding period—from January 22, 2025, to January 31, 2026—with the upside return capped based on options pricing determined at launch.
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Because the fund uses options to gain bitcoin exposure, early redemption may result in unexpected losses or reduced returns, even during a bull market. This mechanism mirrors strategies seen in traditional equity "buffer funds," which have surged in popularity after the 2022 market downturn when both stocks and bonds suffered simultaneous declines.
However, Matt Kaufman, head of ETFs at Calamos, emphasizes that crypto’s unique return distribution—characterized by extreme left-tail risks and explosive right-tail rallies—requires a different approach than conventional buffer models.
“If you look at the S&P 500 returns, it looks like a normal bell curve distribution. If you look at the distribution of bitcoin returns, it looks much more like a smile. It's all left tail risk or extreme far right on the upside. So if you built a buffer, you're really not protecting against much of anything,” Kaufman explained.
To address this, Calamos plans to introduce additional “floor” funds offering 90% and 80% downside protection, allowing for limited initial losses in exchange for higher upside participation.
A Growing Trend: Merging Crypto with Derivatives and Income Strategies
Calamos isn’t alone in pioneering this space. Several other major ETF issuers are developing similar products aimed at blending digital assets with established investment frameworks.
- Innovator Capital Management and First Trust have both filed proposals for ETFs using outcome-based strategies tied to bitcoin ETF indices.
- Meanwhile, firms like Grayscale and Roundhill are exploring covered call strategies that generate income from bitcoin holdings—potentially appealing to yield-seeking investors in a high-volatility environment.
These developments signal a broader shift: institutional investors and advisors are increasingly looking for ways to integrate crypto into diversified portfolios without taking on full directional risk.
Why Now? The Role of Market Infrastructure and Regulation
A key enabler of these new products is the maturation of the bitcoin options market. Options linked to spot bitcoin ETFs only became widely available in late 2024, creating the necessary infrastructure for structured products.
While liquidity concerns have affected other derivative-heavy funds—such as those tracking MicroStrategy shares, often used as a proxy for bitcoin exposure—Kaufman expressed confidence in the capacity and stability of the options market supporting the CBOJ fund.
“We have no concerns about capacity whatsoever,” he said.
Additionally, the regulatory landscape appears increasingly favorable. With expectations of a more crypto-friendly Securities and Exchange Commission under the incoming administration in 2025, further product innovation is likely on the horizon.
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Core Keywords Driving This Trend
The emergence of these hybrid ETFs reflects growing demand around several key themes:
- Bitcoin ETFs
- Structured protection ETFs
- Crypto derivatives
- Downside protection
- Defined outcome funds
- Options-based investing
- Crypto volatility management
- Financial innovation 2025
These terms not only capture investor interest but also align with search intent for those researching safer ways to gain exposure to digital assets.
Frequently Asked Questions (FAQ)
What is a structured protection ETF?
A structured protection ETF is designed to limit downside risk—sometimes offering full or partial loss protection—while providing capped upside exposure to an underlying asset, such as bitcoin. These funds typically use options and fixed-income securities to achieve their objectives.
How does the Calamos CBOJ ETF protect against losses?
The CBOJ fund offers 100% downside protection over its 12-month term by using a combination of long-dated put options on the Cboe Bitcoin U.S. ETF Index and U.S. Treasury holdings. As long as the fund is held until maturity, investors won’t lose principal regardless of how much bitcoin drops.
Can I sell my shares before the 12-month period ends?
Yes, but doing so may result in losses or reduced returns. Because the fund relies on time-sensitive options contracts, selling early disrupts the intended risk-return profile and could lead to unpredictable outcomes.
Are there other types of crypto-focused structured funds coming?
Yes. In addition to full downside protection, Calamos plans to launch “floor” funds with 90% and 80% protection levels. Other firms are developing covered call strategies and leveraged/inverse products tied to bitcoin ETFs.
Why are financial advisors hesitant to recommend bitcoin?
Many advisors avoid direct bitcoin investments due to extreme price volatility and lack of regulatory clarity. Structured products like CBOJ help bridge this gap by offering managed risk profiles that fit better within traditional portfolio frameworks.
Will more bitcoin-linked ETFs launch in 2025?
Absolutely. With growing investor demand, improving derivatives infrastructure, and anticipated regulatory support, multiple new crypto-integrated ETFs are expected throughout 2025—from buffer funds to income-generating models.
The Future of Crypto Investing: Smarter Access, Better Risk Control
As spot bitcoin ETFs proved in 2024, mainstream adoption is underway. Now, the next phase is beginning: refining access through intelligent financial engineering.
These new generation ETFs don’t just offer exposure—they offer control. By integrating options, Treasury assets, and outcome-based design principles, they make crypto investing viable for a much wider audience, including retirees, conservative investors, and advisory platforms.
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With innovation accelerating and market infrastructure maturing, 2025 could mark the year when crypto transitions from speculative asset to strategic portfolio component—for everyone, not just the risk-tolerant few.