Calamos Investments is targeting two of the most popular ETF themes with a new fund that offers 100% downside protection on bitcoin investing.

Slated to launch later this month, the Calamos Bitcoin Structured Alt Protection ETF (CBOJ) builds on the Chicago area firm's suite of exchange-traded funds that offer 100% downside protection on the S&P 500 Index, the Russell 2000 Index, and the Nasdaq Composite Index.

Those buffered strategies have taken in more than $500 million since launching last May.

Anticipating a strong appetite for buffered bitcoin exposure among financial advisors, Calamos has also filed for ETFs offering varying levels of downside protection of bitcoin.

“What we’re seeing is massive adoption of bitcoin, but a lot of folks have watched from the sidelines,” said Matt Kaufman, head of ETFs at Calamos.

“People have seen the potential of bitcoin, but a lot of them are worried about the risk,” he added. “This strategy is allowing people a chance to participate and preserve their wealth at the same time.”

Like all buffered strategies, the downside protection, which is gross of a 0.68% expense ratio, is provided in exchange for a cap on upside performance.

The specific cap, which is based on options pricing, will be announced closer to the Jan. 22 launch of the ETF, but Kaufman said the cap over the 12-month outcome period will be in the 10% range.

Kaufman envisions CBOJ will be used by financial advisors to help clients tiptoe into the crypto investing space.

He suggested blending the 100% downside protection with a spot bitcoin ETF to increase the upside potential while protecting a portion of the downside.

Stuart Chaussee, who runs the Beverly Hills, California-based financial advisory firm Stuart Chaussee & Associates, described the new Calamos strategy as a “fascinating offering that may encourage advisors and investors who have avoided the crypto space to reconsider it.”

“The key consideration will be what the upside cap looks like on the launch date and whether it competes well with upside caps in other risk assets, most notably stocks,” he added. “Still, for investors and advisors looking to diversify a portfolio into the crypto space, this a very conservative and compelling way to do so.”

According to filings with the Securities and Exchange Commission, Calamos plans to tweak the downside protection with buffer strategies that limit the bitcoin losses over 12 months to 10% and 20%.

“We saw massive adoption of spot bitcoin ETFs, and I think there’s a lot of money on the sidelines looking to access bitcoin but in a more risk-adjusted way,” Kaufman said.