On Monday (19), BlackRock submitted to the U.S. Securities and Exchange Commission (SEC) a registration filing for the iShares Bitcoin Managed Protection ETF (PBIT). The new fund intends to offer exposure to Bitcoin's appreciation with mechanisms to reduce part of the losses, but it requires a trade-off: gains are also limited.
The proposal uses options contracts and fixed-income investments to manage this exposure. Unlike the iShares Bitcoin Trust (IBIT), which holds Bitcoin in its portfolio, PBIT does not intend to buy the cryptocurrency directly or shares of funds linked to it.
The operation provides for the purchase and sale of options related to IBIT or equivalent assets. The options purchased allow participation in upward moves, while the sold ones help finance the strategy but set a ceiling on gains. Part of the funds will also be allocated to cash and short-term fixed-income instruments, whose yields may offset costs and potential losses.
BlackRock plans to distribute these operations across three sets of contracts, called tranches, normally with staggered maturities. This structure allows positions to be renewed periodically, but it means that different portions of the fund have their own protection and appreciation parameters.
Why PBIT's protection does not limit losses to 10%
The prospectus filed with the SEC states that, in a typical tranche, the strike price of the purchased options corresponds to approximately 90% of the initial value of the reference asset. This represents an initial exposure to losses of about 10% in that portion, before fees and expenses.
However, this percentage does not constitute a guaranteed loss limit for those who buy ETF shares.
The difference lies in the product's own structure. Because the tranches start on different dates and may use different strike prices, the investor is exposed to the combined result of several positions. The asset manager may also change the protection parameters according to market conditions.
The document further clarifies that when the reference asset appreciates after the start of a tranche, the potential loss calculated from the most recent price may exceed the 10% initially considered. Fees and expenses further reduce the effective protection.
Another factor is the possibility that BlackRock may close, reduce or postpone options positions. These decisions can change both the protection against declines and the participation in gains. In periods of extreme volatility, the prospectus admits substantial or even total losses of the investment.
The upside limit will also not be uniform. Each tranche will have a ceiling determined by the conditions of the sold options, which means that PBIT may perform significantly worse than Bitcoin during significant rallies.
The filing submitted on October 19, 2026 does not yet represent regulatory approval. The prospectus remains preliminary, with the management fee and the launch date not yet finally defined. Until the registration becomes effective and the applicable requirements are met, PBIT may not begin selling its shares.
