Calamos Investments CEO on Bitcoin Volatility and Protected Investment Strategies

Bitcoin's Volatility and Market Position

• 💡 Bitcoin has been the best-performing asset class over the last 12 years, but it remains extremely volatile.
• 🎯 Currently, only 4% of the global population participates in Bitcoin, highlighting a significant opportunity for broader adoption.
• ⚠️ The transcript notes that since 2012, Bitcoin has experienced over 16 drawdowns of more than 30%, 19 of more than 20%, and 33 of more than 10%.
• 📈 Despite its volatility, Bitcoin is presented as an asset that is here to stay and is expected to trend upwards.

Calamos Investments' Crypto Strategy

• 🛡️ Calamos Investments has developed strategies to mitigate Bitcoin's volatility, aiming to onboard more participants.
• 🚀 They offer protected Bitcoin ETFs with varying levels of downside protection (100%, 90%, and 80%) to cater to different risk appetites.
• ✅ These protected products have performed well, especially during recent drawdowns, outperforming Bitcoin itself.

How Protected Products Work

• 💰 The protection strategy involves purchasing zero-coupon bonds and options on the Bitcoin index.
• 🧩 Specifically, they buy options and sell out-of-the-money options to lock in protection.
• 📊 An example product, CPTTO, launched on October 7th with 80% protection, initially offering up to 42% upside. After a 30% Bitcoin drawdown, the product only fell 17%, now offering 63% upside with only a potential 7% loss to maturity.
• 📈 These products exhibit great Sharpe ratios, attracting interest from both retail and institutional investors.