EL7.AI
CryptoMedium•21 October 2026•
5 min read

BlackRock Files for Bitcoin Fund Targeting Initial Maximum Loss of About 10% Per Tranche

Key Facts

1Each tranche targets initial maximum loss exposure of about 10% before fees and expenses, with scope to adjust the protection terms.
2The strategy typically uses 3 overlapping sets of call options with successive monthly starts.
3The filer elected for the registration amendment to become effective 75 days after filing, without confirming a trading launch date.
4The prospectus warns investors could lose some or all of their investment despite the protection strategy.

BlackRock's iShares Trust filed an amendment to a registration statement for a bitcoin exchange-traded fund on 19 October 2026, targeting initial maximum loss exposure of about 10% for each options tranche before fees and expenses. The proposed product is called "iShares Bitcoin Managed Protection," with the proposed ticker PBIT, according to the preliminary prospectus filed with the U.S. Securities and Exchange Commission. BlackRock Fund Advisors serves as the fund's investment adviser. The proposal seeks to combine exposure to gains in IBIT, or similar bitcoin exposure, up to an approximate cap, with an effort to provide downside protection. The filing is a post-effective amendment to the registration statement with the SEC, rather than regulatory approval of the product or an announcement that trading has begun.

The strategy typically uses 3 overlapping sets of call options starting in successive months, according to the prospectus's description of the proposed portfolio construction. When a tranche expires, the strategy replaces it with a new tranche, keeping exposure spread across sets that began at different times. The targeted loss level applies to each tranche when its options are purchased, with scope to adjust the protection terms on which it is structured. This mechanism does not mean absorbing a fixed initial percentage of bitcoin losses, nor does it give the fund as a whole a fixed loss floor or gains cap. The proposed fund does not invest directly in bitcoin or bitcoin exchange-traded products, instead using options to implement the exposure sought by the strategy.

The prospectus warns that an investor could lose "some or all of their investment," despite the strategy's efforts to provide protection against falling prices. The protection described in the proposal is an investment objective, rather than a guarantee of the capital an investor puts into the fund. The prospectus says extreme volatility could reduce the strategy's ability to provide its targeted protection, as well as its participation in gains in the underlying asset. The targeted initial loss exposure is also calculated before fees and expenses, which in turn affect the investor's outcome. The proposal's terms thus combine limited participation in gains with an attempt to constrain downside at the options-tranche level, while leaving the possibility of losses.

The proposal enters an established market for bitcoin products, after the U.S. Securities and Exchange Commission approved the listing and trading of a group of spot products linked to the cryptocurrency on 10 January 2024. BlackRock already has IBIT, whose net assets stood at $65,704,430,346 on 19 October 2026, according to the fund's iShares page. On the same date, its net asset value total return was down 6.47% since the start of the year. The filing for the managed protection strategy coincides with this decline in the existing fund's year-to-date return. The proposed product targets exposure to gains in IBIT, or similar bitcoin exposure, while adding the protection arrangements described in its prospectus.

BlackRock also has another bitcoin-linked strategy with the ticker BITA, which seeks to generate monthly income from options premiums, according to iShares. This strategy sells call options on IBIT covering about 25–35% of the portfolio, according to the company's description of how it works. BlackRock explains that selling covered calls exchanges some participation in the underlying asset's gains for upfront income from options premiums. BITA's targeted income, according to this description, comes in exchange for giving up some potential gains on the portion covered by the options sales. The new proposal, meanwhile, places the pursuit of downside protection alongside exposure to gains up to an approximate cap within its stated investment objective.

Calamos previously announced the launch of CBOJ on 22 January 2025, among products linking exposure to bitcoin gains with downside protection arrangements. The company's announcement described the product as offering gains up to a specified cap, with targeted downside protection of 100% over a one-year outcome period. In a historical comparison published by Calamos, the fund fell 0.98% during the period from 22 January to 11 March 2025. That compared with a 25.80% decline in bitcoin over the same period, according to the company's table comparing the product's performance with the cryptocurrency. The protection announced for that product was tied to an annual outcome period, while BlackRock's proposal builds its strategy around overlapping options tranches starting monthly.

In the next regulatory step, the filer elected for the amendment to become effective 75 days after its filing dated 19 October 2026. This interval concerns the effectiveness of the registration amendment and does not represent a confirmed date for the proposed fund to begin trading. The management fee entry remained without a specified percentage in the preliminary prospectus filed with the SEC. The strategy's terms also allow adjustments to the protection arrangements on which the options tranches are established. Under the stated objective, participation in gains will remain subject to an approximate cap, alongside efforts to provide downside protection under the terms set for each tranche.