EXCLUSIVE: Calamos Bitcoin ETF Upside Tops 40%: Top Exec Reveals the Catch Investors Can’t Ignore

Calamos Investments’ protected Bitcoin ETF is offering investors the potential for gains above 40% over a one-year period, following Bitcoin’s recent pullback. But the opportunity comes with a trade-off: investors accept a limit on their potential returns in exchange for protection against a portion of Bitcoin’s downside.

Bitcoin ETF Upside Cap Climbs Above 40%

The Calamos Bitcoin 80 Series Structured Alt Protection ETF – October (BATS:CBTO) began a new one-year outcome period on Oct. 7, with a gross starting upside cap of 36.22%. By Oct. 16, the cap had risen above 40% as Bitcoin declined slightly, according to Matt Kaufman, Calamos’ Global Head of ETFs.

An upside cap is the maximum gain an ETF can deliver over its defined outcome period, regardless of how much the underlying asset rises. For example, with a 40% cap, a $10,000 investment could grow to a maximum of $14,000 before fees and expenses, even if Bitcoin gains 60% or 100%.

"The current upside cap rates are higher than the starting cap rates (because Bitcoin is down slightly since the strike date)," Kaufman told Benzinga.

The cap is not a forecast or a guaranteed return. An investor’s actual outcome depends on Bitcoin’s performance, the ETF’s structure and the price paid for the fund.

Higher Upside Comes With More Downside Risk

CBTO targets 80% downside protection, meaning investors remain exposed to approximately the first 20% of losses over the defined outcome period, before fees and expenses.

Calamos also offers two other protection levels. The Calamos Bitcoin Structured Alt Protection ETF – October (BATS:CBOO) targets 100% protection against losses, while the Calamos Bitcoin 90 Series Structured Alt Protection ETF – October (BATS:CBXO) targets 90% protection.

Their gross starting upside caps for the new October series were 8.32% for CBOO and 20.55% for CBXO, compared with 36.22% for CBTO. The trade-off is straightforward: investors seeking greater downside protection generally have to accept a lower cap on potential gains.

Interest Rates and Options Pricing Shape Returns

Interest rates, Bitcoin volatility and options pricing influence the caps. Higher interest rates can increase the budget available for options exposure, while the cost of buying and selling options determines how much upside the strategy can offer.

"I would focus on the net cost of the options package relative to the financing budget, rather than name one variable as the biggest driver in every market," Kaufman said.

Why Buying Midway Through the Period Matters

Investors buying after an outcome period begins must assess the remaining upside and downside from their own purchase price. The advertised protection applies relative to the period’s starting level, not automatically to the price paid by a new investor.

For investors seeking Bitcoin exposure with a defined level of downside protection, a higher cap may improve the potential reward. However, those expecting a powerful rally may prefer spot Bitcoin ETFs, which offer uncapped upside while exposing investors to Bitcoin’s full downside.

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