BlackRock filed with the SEC on October 19 for the iShares Bitcoin Managed Protection ETF, ticker PBIT. The fund would hold call option spreads on IBIT, BlackRock's $65.7 billion spot bitcoin ETF, rather than bitcoin itself. Each spread is built so that a tranche's initial loss stops near 10 percent, in exchange for a cap on its gains.
The document is a post-effective amendment to the iShares Trust registration, Form 485APOS, and it asks to become effective 75 days after filing. That date is January 2, 2027. The management fee, the listing exchange and the prospectus date are left blank. Bloomberg Intelligence analyst James Seyffart told The Block that "this is the third Bitcoin ETF filing from them", after IBIT in January 2024 and the Bitcoin Premium Income ETF, BITA, in June 2026.
How a call spread caps both ends
A call option is the right to buy an asset at a set price, the strike, until a set date. For each tranche, PBIT would buy a call struck at about 90 percent of IBIT's value on the day the tranche starts. The filing names that level the Tranche Protection Start Value. Because the call is already in the money, it tracks IBIT one for one above the strike and stops losing value below it. That is where the roughly 10 percent initial loss limit, called the Floor, comes from.
Buying that call costs a premium. To pay part of it, the fund sells a second call at a higher strike, the Tranche Cap Value. Above that price the sold call hands back every dollar IBIT gains, so the tranche's upside ends there. The rest of the portfolio sits in cash, money market funds and short-term government and investment-grade debt, whose interest is meant to cover the remaining option cost. The fund expects to use FLEX options, exchange-listed contracts with negotiated terms.
Take a tranche that starts with IBIT at $100 a share, as an arithmetic example and not a forecast. The fund buys a call struck near $90 and sells one at a higher level, say $120, which the filing does not fix in advance. If IBIT falls to $70, the purchased call expires worthless and the tranche has lost about 10 percent plus its net option cost, not 30 percent. If IBIT climbs to $140, the tranche earns the move from $100 to $120 and nothing beyond it.
Sets the Floor: about 10 percent of initial loss exposure before fees.
Premium offsets the purchase; gains stop at the Tranche Cap Value.
Interest income pays part of the net option cost.
Staggered monthly starts; one expires and one is added each month.
Why "managed" matters more than "protection"
Three tranches run at once, with start dates staggered across a calendar quarter. Each month one tranche expires and a new one begins at then-current prices. So the fund has no single floor.
One third of the portfolio resets every month, and the filing says that if IBIT rises after a tranche starts, the loss measured from the new price will exceed the Floor. BlackRock Fund Advisors also keeps "broad discretion" to raise or lower the protection start value and the cap, to hold more or fewer tranches, and to adjust positions before expiry.
The prospectus states the limit of the promise in its own words: "investors may lose some or all of their money". The floors and caps "do not take into account fees and expenses", and the fee line is a blank. IBIT charges a 0.25 percent sponsor fee and BITA 0.65 percent, so the fee is the first number to look for when BlackRock amends the filing.
| Fund | Launched or filed | What it holds | Fee |
|---|---|---|---|
| IBIT | January 5, 2024 | Bitcoin, held in trust | 0.25% |
| BITA | June 9, 2026 | IBIT and bitcoin, with calls sold on 25 to 35 percent of the position | 0.65% |
| PBIT | Filed October 19, 2026 | Call spreads on IBIT plus short-term fixed income, no bitcoin | Not yet disclosed |
The three products answer three different questions. IBIT gives the full price move for the lowest fee. BITA gives up part of the upside for monthly income. PBIT gives up the upside above a cap and in return limits the first leg down, as long as the tranche is young enough for its floor to still sit near the current price.
What to watch
The amended filing is the next event. It has to arrive with a fee, an exchange and a dated prospectus before the fund can take effect, and the earliest date the current filing allows is January 2, 2027. The SEC can also ask for changes, so that date is a floor of its own, not a launch date.
The first caps will show what the trade costs. The sold call's strike depends on bitcoin option prices at each tranche start, and the filing gives no target. A calm options market produces a tighter cap, a volatile one a wider cap, and the fee comes out of both. Our guide to bitcoin ETF flows explains how to read the daily flow figures that will follow once the fund trades, and the T. Rowe Price TKNZ launch shows what an actively managed crypto ETF looked like on day one.
A fund that limits losses also limits gains, and the options market sets the price of that exchange every month. Nothing here is investment advice.
