BlackRock Files for Bitcoin ETF Seeking Downside Protection

BlackRock filed for a Bitcoin (BTC) ETF designed to cap potential gains while seeking to cushion losses, proposing another way for U.S. investors to gain exposure to the asset.

The proposed iShares Bitcoin Managed Protection ETF, listed in the filing under the ticker PBIT, would use options tied to BlackRock’s iShares Bitcoin Trust ETF (IBIT). It would generally spread those positions across three overlapping tranches and hold cash and fixed-income investments. The fund would not hold Bitcoin or Bitcoin exchange-traded products directly.

For each tranche, the fund would typically buy call options with a strike price near 90% of the reference asset’s value when the position begins. That structure implies initial maximum loss exposure of about 10% for the tranche before fees and expenses. Selling other call options would help cover costs while limiting gains.

The 10% figure is not a fixed loss limit for PBIT shareholders. Protection levels and upside caps can change, and investors could lose some or all of their investment.

The preliminary prospectus leaves the management fee blank. Shares cannot be sold until the registration statement takes effect, and the SEC has not approved or disapproved them.