New Bitcoin ETF Limits Losses To 20%, Offers Risk-Controlled Exposure

Innovator Capital Management rolled out the Uncapped Bitcoin 20 Floor ETF – Quarterly QBF, on Feb. 6, with a competitive expense ratio of 0.79%.

The ETF offers investors exposure to Bitcoin's BTC/USD price movements while safeguarding investments against significant losses, allowing investors to capture up to 80% of Bitcoin's positive price swings over a quarterly period.

The launch of QBF comes at a time when demand for cryptocurrency exposure is surging, as the crypto world becomes more regulated. However, many investors remain cautious about invest in the volatile asset class. One important differentiating factor of this ETF is it ensures that investors will not lose more than 20% of any price decline, putting hesitant investors at ease.

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Unlike traditional Bitcoin ETFs that invest directly in the cryptocurrency, QBF tracks Bitcoin's price movements in a controlled manner. This approach offers investors and financial advisors a structured way to gain crypto exposure without the full brunt of market turbulence.

“The Fund provides investment exposure to the price return of bitcoin (i.e., "spot" bitcoin prices) (the "Bitcoin Price") by investing in a combination of FLexible EXchange Options ("FLEX Options") that reference one or more exchange-traded products that hold bitcoin directly (each, a "Bitcoin ETP") or the CBOE Bitcoin U.S. ETF Index,” read an excerpt from its prospectus submitted with the SEC.

“The Fund seeks to provide shareholders that hold Shares for the entire Outcome Period with a maximum loss experienced by the Bitcoin Price of 20% (the "Floor") over the course of the Outcome Period by holding 80% of the Fund's assets in U.S. Treasuries in order to preserve the Fund's capital in the event the FLEX Options expire worthless,” the prospectus further read.

The cryptocurrency ETF market continues to expand, with investors increasingly seeking innovative investment solutions.

As Bitcoin and the broader cryptocurrency market mature, funds like QBF signal a shift toward structured, risk-managed investment products that are suitable for seasoned investors as well as newcomers looking for safer exposure to digital assets.

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