BlackRock Makes Surprise Bitcoin ETF Move

BlackRock is eyeing a new Bitcoin ETF product that it can add to its arsenal. This one is a Bitcoin ETF with some downside protection.

The global asset management giant is apparently eyeing creating a Bitcoin ETF with some sort of downside protection. This can be found in the newly released prospectus.

The asset management giant is eyeing creating an iShares Bitcoin Managed Protection ETF. It will be called PBIT and seems like an attempt to get some Bitcoin exposure in a more protected manner.

According to the filing, the new ETF would seek to offer investors some upside exposure to the BlackRock spot Bitcoin ETF (IBIT) "and/or similar bitcoin exposure" to some degree. But it would be aiming for downside protection.

So, basically, you would not get unlimited upside potential if Bitcoin starts rising. But you would have a sort of cushion if the BTC price starts to fall.

The new Bitcoin ETF, in concept, could be targeting those who want Bitcoin exposure but don't necessarily want full Bitcoin volatility. So, they would have exposure to IBIT plus some kind of option strategy to get more specific results.

Notable filing 

This is an interesting filing because it points to BlackRock further exploring more specific Bitcoin ETF products. Instead of just offering spot exposure, the asset manager is attempting to diversify further.

IBIT, as the flagship Bitcoin ETF, has been a very popular Bitcoin investment vehicle. So, having a managed protection variant would make investing in Bitcoin even more appealing to more risk-averse investors.

The filing comes amid a larger trend among ETF issuers. They are increasingly trying to figure out more ways to package Bitcoin differently for varying risk appetites.

We've seen other companies launching buffered/defined outcome Bitcoin ETFs. But BlackRock may draw a lot more attention to this type of niche product.

At the time of the included market updates in the filing, IBIT was trading at $46.32, down slightly from the previous day.

So, PBIT might be another string in the crypto ETF bow for BlackRock (if approved). It would be a product targeting investors who are willing to forgo some upside for more protection.