Investing in bitcoin is well-known for its volatility, characterized by significant price fluctuations within short periods. This inherent volatility can result in substantial rallies or sharp downturns, compelling investors to adapt their strategies accordingly. Nevertheless, recent trends indicate a predominantly positive trajectory for bitcoin, prompting many advisors and investors to consider incorporating the cryptocurrency into their portfolios as a potential store of value.
To assist those navigating bitcoin’s volatility, the Calamos Laddered Bitcoin 80 Series Structured Alt Protection ETF (CBTL) offers a structured approach. Managed by Calamos Investments, CBTL allows investors to gain exposure to a diversified collection of four distinct Calamos Protected Bitcoin ETFs. These underlying funds utilize an options strategy to provide a risk-adjusted way to gain bitcoin exposure.
One of the fund’s appealing features is its built-in downside protection. By limiting total losses to -20% over a defined one-year period, CBTL aims to mitigate some of the concerns associated with bitcoin’s propensity for sudden price drops. Considering bitcoin’s notable ability to plummet within just a day, this level of risk management may offer investors greater confidence as they pursue the cryptocurrency’s potential returns.
In terms of long-term capital appreciation, CBTL presents promising opportunities. While the underlying ETFs impose upside caps on returns, they were launched with caps exceeding 40%, hinting at substantial growth possibilities consistent with bitcoin’s historical performance.
The laddered structure of CBTL, which incorporates multiple Protected Bitcoin ETFs, creates a strategic advantage for investors. This design enables access to varying time horizons and growth opportunities, potentially diluting the impact of drawdowns felt in other areas of the portfolio. By focusing on downside security, CBTL enhances risk management while empowering investors to capitalize on bullish movements in bitcoin.
Investors considering CBTL are urged to carefully review the fund’s investment objectives, risks, charges, and expenses before making any decisions. It’s important to understand that investments in the fund carry inherent risks, including potential loss of principal. These risks may be amplified during periods of heightened market volatility. Various market trading risks exist, such as liquidity risk, market risk, and options risk, which could affect the overall investment experience.
Additionally, shareholders will encounter investment returns that may differ from the underlying ETFs, as CBTL does not directly pursue a defined outcome strategy. The fund’s exposure to underlying ETFs during their respective outcome periods may lead to investment returns that do not align with those of any single underlying ETF.
Investors are reminded that the underlying ETFs aim to provide specific protection, but this may only be realized by holding shares from the start to the end of an outcome period, which typically lasts about a year. Conditions affecting the market can lead to outcomes that do not meet expectations, exacerbating potential losses.
In conclusion, while CBTL presents a structured solution for gaining bitcoin exposure amidst its volatility, potential investors should diligently weigh both the advantages and risks associated with this type of investment. For ongoing updates and detailed information, resources on the fund’s website offer insights into investment outcomes and strategies.
