As reported by Fixygen, American investment company BlackRock has filed an application with the US Securities and Exchange Commission (SEC) to register a new exchange-traded fund, iShares Bitcoin Managed Protection ETF, which will allow investors to earn income from bitcoin's growth with partial risk limitation.
According to the preliminary prospectus of the fund, published in the SEC database, the new instrument is planned to be listed on the exchange under the ticker PBIT. Its strategy involves participating in the growth of the value of the iShares Bitcoin Trust ETF (IBIT), the main bitcoin fund of BlackRock, or other bitcoin-related instruments, while simultaneously limiting potential losses.
Unlike a traditional spot bitcoin ETF, which directly owns the cryptocurrency, the new fund will not purchase bitcoins or shares of other cryptocurrency exchange-traded products. Instead, it intends to use a combination of options and fixed-income instruments.
The basis of the investment strategy will be call options, which allow for earning income in the event of an increase in the value of the underlying asset. BlackRock plans to simultaneously buy and sell such options, forming so-called option spreads.
This structure allows for limiting potential losses in the event of a decline in the value of bitcoin, but at the same time sets an upper limit on profitability in the event of a significant increase in the cryptocurrency.
According to the preliminary documentation, BlackRock intends to form three overlapping option portfolios with different start dates. Typically, one of the portfolios will complete its work each month, and a new one will be formed in its place.
For each such portfolio, an initial protection level is envisaged, at which potential losses from changes in the value of the underlying asset are approximately limited to 10% at the time of purchasing options, excluding commissions and expenses.
At the same time, the company emphasizes that this is not about guaranteed capital protection at the level of the entire fund. The level of potential losses may change depending on the market situation, the time of purchasing shares, and the parameters of the option contracts.
The fund plans to invest an additional portion of its assets in cash, money market instruments, short-term government bonds, and other high-quality debt securities.
The interest income received is intended to be used to partially cover the costs of option strategies and reduce possible investment losses.
BlackRock warns that the new product is not designed to completely eliminate the risks associated with bitcoin. In conditions of sharp fluctuations in the cryptocurrency market, investors may lose part or all of the invested amount.
The key difference between the new fund and a regular bitcoin ETF lies in the nature of profitability. Owners of spot funds receive a result directly linked to the dynamics of the cryptocurrency's value, minus expenses. Investors in the iShares Bitcoin Managed Protection ETF will participate in the growth of the underlying asset only within the limits defined by the options strategy.
Thus, in the event of a significant increase in the price of bitcoin, the profitability of the new fund may turn out to be significantly lower than the dynamics of the cryptocurrency itself. At the same time, the strategy is aimed at mitigating the consequences of a market decline.
The proposed product will expand the line of cryptocurrency investment instruments from BlackRock, which in January 2024 launched the spot fund iShares Bitcoin Trust ETF under the ticker IBIT.
In June 2026 the company also presented the iShares Bitcoin Premium Income ETF, focused on generating income from options premiums.
The new strategy differs from both instruments in that it combines limited participation in the growth of bitcoin's value with a mechanism for partial protection against declines.
The development of similar products reflects the expansion of the institutional market for cryptocurrency investments. Managing companies offer investors not only direct investment in digital assets through exchange-traded funds, but also instruments with various combinations of profitability and risk.
For institutional investors, investment consultants, and owners of diversified portfolios, such products may be of interest as an alternative to direct ownership of cryptocurrency.
At the same time, protection mechanisms involve additional costs and limitations on profitability, so their economic efficiency depends on market conditions.
According to the registration documents, BlackRock expects the application to become effective 75 days after its submission. Meanwhile, the preliminary prospectus contains incomplete information, including regarding the fund's management commission.
Registration does not yet mean approval to sell shares. The SEC has not approved the new investment product, and the final launch date has not yet been announced.
BlackRock is one of the largest investment management companies in the world. Through the iShares platform, the group offers a wide range of exchange-traded funds, including products based on stocks, bonds, commodities, and digital assets.
