BLACKROCK FILED FOR A BITCOIN FUND THAT “DOES NOT INVEST DIRECTLY IN BITCOIN” — IT BUYS OPTIONS ON IBIT AND HOLDS TREASURIES — THE SAME DAY IBIT TOOK IN $665.2 MILLION

BlackRock filed on October 19 for the iShares Bitcoin Managed Protection ETF, ticker PBIT. The filing says it plainly: “The Fund does not invest directly in bitcoin or bitcoin exchange-traded products.” It buys options on IBIT, BlackRock’s spot fund, and keeps the rest in cash and short-term government debt.

It runs three overlapping sets of call spreads on IBIT that start a month apart. Each set’s protection usually starts at about 90% of IBIT’s value, so losses are meant to stop around 10%, before fees. Calls it sells cap the gains. There’s no fixed cap, and the fee lines are blank. The filing says it can take effect 75 days after it was filed.

The same day, IBIT took in $665.2 million, SoSoValue data show, per Decrypt. It was the only spot bitcoin fund with money coming in. Fidelity’s FBTC lost $83.6 million and Grayscale’s GBTC lost $54.9 million, for $526.6 million net across all 12. CoinDesk points to why BlackRock wants in: Calamos’s protected bitcoin fund fell about 1% over a year in which bitcoin fell as much as 52% from its high.

What you hold decides what you have. An IBIT share is a claim on bitcoin a custodian holds. A PBIT share would be a claim on options written on that claim, plus Treasury bills. That can suit someone who wants less risk. It just isn’t bitcoin, and the filing doesn’t pretend it is. At the time of this writing, bitcoin was $83,028.