BlackRock files for PBIT, an options-based Bitcoin ETF that wouldn't hold BTC
In brief
- BlackRock filed with the SEC on Oct. 19 for the iShares Bitcoin Managed Protection ETF (PBIT).
- PBIT's prospectus excludes direct Bitcoin holdings and spot Bitcoin ETP holdings.
- Three overlapping call-spread tranches would give roughly 10% initial downside exposure before fees.
- PBIT shares can't be sold until the registration filing becomes effective.
- Calamos already runs protected Bitcoin funds CBOJ and CBXJ, each holding about $16 million.
How the protection works
The filing registers PBIT under the Investment Company Act of 1940. The prospectus describes three overlapping long call-spread tranches with staggered monthly starts (one tranche is typically replaced each month). Each tranche would buy calls with a strike near 90% of the reference asset's value and sell higher-strike calls that cap gains. That works out to roughly 10% initial exposure to declines before fees.
Fixed-income holdings would provide income and some loss mitigation, CryptoSlate reported. Qualifying fixed-income holdings used to implement the strategy count toward the fund's 80% investment policy.
There's a catch.
The roughly 10% threshold applies to individual tranches, not the whole portfolio. BlackRock warns that a tranche's distance to its strike can exceed the original 10% once the reference asset rises, and that investors could lose some or all of their investment.
Where the Bitcoin demand question comes in
The prospectus acknowledges that PBIT's use of IBIT options could increase IBIT's assets and fees paid to BlackRock affiliates. CryptoSlate's view is that money entering PBIT could still reach Bitcoin through the dealers on the other side of its options. Those dealers could hedge by trading IBIT shares or Bitcoin futures, or net the risk against positions they already held. Buying existing IBIT shares doesn't change IBIT's Bitcoin holdings, though; new coins arrive only when authorized participants create new shares.
CryptoSlate ran its own hypothetical (it's not a BlackRock projection). A $1 billion PBIT with option notional equal to its assets and a net delta of 0.40 would create $400 million of hedge-equivalent exposure for dealers. If half were hedged through IBIT and a quarter of that demand led to creations, the result would be $50 million, about 610 BTC at $82,000.
Calamos got there first
Calamos launched protected Bitcoin funds in 2025. As of Oct. 19, its CBOJ held $15.9 million and CBXJ held $16.4 million, per CryptoSlate. For the January-series outcome period beginning Feb. 2, 2026, CBOJ had an initial upside cap of 8.36% before fees while targeting full protection, and CBXJ (which limits the initial loss to 10% before fees) had a 22.24% cap.
PBIT would need about 61 times CBXJ's current assets to reach $1 billion. BlackRock reported nearly $15.5 trillion of assets under management at the end of the third quarter.
Frequently asked questions
Does BlackRock's proposed PBIT fund hold Bitcoin?
No. The preliminary prospectus excludes direct Bitcoin holdings and spot Bitcoin ETP holdings. The fund would hold options and fixed-income securities and get its Bitcoin exposure through derivatives.
How does PBIT's downside protection work?
The prospectus describes three overlapping long call-spread tranches with staggered monthly starts. Each tranche buys calls struck near 90% of the reference asset's value and sells higher-strike calls that cap gains, giving roughly 10% initial exposure to declines before fees. That threshold applies to individual tranches, not the whole portfolio.
Can investors buy PBIT shares yet?
No. PBIT is a proposed fund in registration, and its securities can't be sold until the registration statement becomes effective. BlackRock filed with the SEC on Oct. 19.
