BlackRock files for a third bitcoin ETF that aims to limit losses to about 10% a tranche on its $65 billion IBIT, in exchange for a ceiling on gains

BlackRock wants to sell bitcoin exposure with a safety net. On Monday iShares Trust filed a registration statement with the Securities and Exchange Commission for the iShares Bitcoin Managed Protection ETF, which "seeks to provide upside exposure to the iShares Bitcoin Trust ETF" while also offering some protection against losses. The filing gives the ticker as PBIT.

The fund would not buy bitcoin or bitcoin funds directly. Instead it would buy in-the-money call options on IBIT and sell out-of-the-money calls, using the premium from the sold calls to offset the cost of the bought ones, alongside cash and short-term debt. Each set of options is a tranche, and the fund expects to run three tranches at once with starts staggered a month apart across a quarter. For each tranche the filing describes a "Floor" of roughly 10%, the initial maximum loss, and a cap on gains set by the strike of the sold calls. The floor does not count fees, and the filing warns that losses can exceed it if bitcoin rises after a tranche begins, so the protection is not a fixed guarantee.

IBIT launched in January 2024 and holds more than $65 billion, the largest bitcoin ETF, according to The Block's tracker; the Bitcoin Premium Income ETF, which sells options for monthly income, followed in June. The filing leaves the management fee and launch date blank, as Crypto Briefing also noted, and is marked to become effective 75 days after it was made.