BlackRock Files for Bitcoin ETF With No Direct BTC Holdings

BlackRock filed with the U.S. Securities and Exchange Commission on Oct. 19 for the proposed iShares Bitcoin Managed Protection ETF, which would trade under the ticker PBIT. The fund would hold options and fixed-income securities and seek Bitcoin exposure through derivatives. It would not directly hold Bitcoin or spot Bitcoin exchange-traded funds. The securities could not be sold until the fund’s registration statement becomes effective.

PBIT would use three overlapping tranches of long call spreads, with each tranche starting in a different month. One tranche would generally be replaced each month. Each tranche would buy call options with a strike price near 90% of Bitcoin’s value when the tranche begins and sell calls with higher strike prices. The purchased options would provide about 10% of initial downside protection before fees, while the sold calls would limit gains.

The 10% protection level would apply separately to each tranche, not to the fund as a whole. If Bitcoin rises after a tranche begins, its strike price could later be more than 10% below Bitcoin’s market price. BlackRock’s preliminary prospectus says investors could lose some or all of their investment.

PBIT would hold fixed-income assets to generate income and help implement its options strategy. Those holdings would count toward the fund’s policy of investing at least 80% of its assets in qualifying securities. Because the fund’s holdings and options positions could change, the filing does not specify how much Bitcoin exposure investors would receive for each dollar invested.

Dealers selling options to PBIT could hedge their positions with Bitcoin, Bitcoin futures or shares of BlackRock’s iShares Bitcoin Trust ETF, known as IBIT. They could also offset the risk against other positions. Buying existing IBIT shares from another investor would not add Bitcoin to the ETF. New Bitcoin would enter IBIT when authorized participants create new shares.

The filing gives a hypothetical example involving a $1 billion PBIT with options exposure equal to its assets and a net delta of 0.40. That would create $400 million of hedge-equivalent exposure for dealers. If half were hedged through IBIT and one-quarter of that demand led to new share creations, the resulting IBIT demand would be $50 million, or about 610 Bitcoin at a price of $82,000.

The monthly replacement of tranches could change dealers’ hedging activity. Dealers may buy Bitcoin or related instruments when one call spread approaches its strike and sell them when another approaches its upside cap. The direction and size of those trades would depend on each dealer’s wider portfolio and other offsetting positions. Bitcoin trades continuously, including on weekends, while IBIT trades during stock-market sessions, which could lead dealers to use crypto instruments for some hedging.

BlackRock reported nearly $15.5 trillion in assets under management at the end of the third quarter. Calamos launched protected Bitcoin funds in 2025. Its CBOJ fund held $15.9 million and its CBXJ fund held $16.4 million as of Oct. 19. PBIT would need about $1 billion in assets to reach roughly 61 times the size of CBXJ.

Investors could use PBIT as a derivatives-based Bitcoin allocation, replace IBIT holdings with it or hold it alongside a direct Bitcoin position. PBIT’s assets, options positions, published strike prices, IBIT shares outstanding and net creations would show how its activity affects Bitcoin-related exposure.