[Digital Today reporter Jinju Hong (홍진주)] BlackRock, the world’s largest asset manager, has applied to the U.S. Securities and Exchange Commission for an exchange-traded fund designed to mitigate losses from declines in bitcoin prices. The structure aims to reduce downside risk while still participating in bitcoin gains. The move seeks to expand its lineup beyond spot-holding and income-focused products to offerings focused on volatility management.

CoinPost, a blockchain media outlet, reported on Monday that BlackRock has applied to register the iShares Bitcoin Managed Protection ETF. The ticker is PBIT.

Bloomberg ETF analyst James Seyffart described PBIT as a “buffer” bitcoin ETF that partially mitigates losses during down markets. Investors can participate to some extent when bitcoin rises, but in exchange for reduced downside risk they give up part of the upside return.

According to the prospectus, PBIT will be managed based on price movements in BlackRock’s spot bitcoin ETF, the iShares Bitcoin Trust (IBIT). It will not directly hold bitcoin or bitcoin exchange-traded products (ETPs), and it is not structured to track a specific index as-is.

The core is a management strategy that combines options and short-term bonds. The fund buys options across multiple ranges and sells other options to cover part of the cost of purchasing options. The option-selling position helps reduce costs, but also acts as a factor that limits gains when bitcoin prices rise.

The remaining assets will be invested in bonds such as short-term U.S. Treasuries. Interest income generated there will be used to offset options management costs and support the downside-protection strategy.

The degree of loss mitigation will not always remain constant. The prospectus generally presents the initial maximum loss-buffer level for each range as 10 percent, but states the actual level may vary depending on management decisions. It is also not a structure that guarantees a fixed protection level or a profit cap applied uniformly across the fund.

BlackRock warned that if the strategy does not work as expected, investors could lose some or all of their principal. PBIT is therefore not a principal-protected product, but closer to an investment product that uses options to adjust the profit-and-loss profile.

PBIT is a product that expands BlackRock’s bitcoin ETF strategy. BlackRock listed IBIT, a spot bitcoin ETF, in January 2024. In June 2026, it launched the iShares Bitcoin Premium Income ETF (BITA), which distributes option premium income.

If IBIT invests directly in bitcoin price movements, BITA focuses on generating returns through option premiums. PBIT adds a downside risk-mitigation strategy to that lineup.

The groundwork for bitcoin investment products using the options market is also in place. The SEC approved options trading for IBIT in September 2024. Seyffart said bitcoin ETFs with structures that limit downside risk are already being managed by Calamos and First Trust.

The filing aligns with a trend in the bitcoin ETF market away from products that simply bet on price rises and toward more segmented offerings based on investment goals and risk tolerance. Strategies are being split between investors seeking to maximize upside potential and those seeking to reduce the burden of volatility.

PBIT has not yet received SEC approval. The process is at the registration application stage, and the filing states it will take 75 days until it becomes effective. A specific listing schedule has not been disclosed.

Key points for investors to review include how much loss buffering is actually possible, at what level upside gains are capped, and how options results may vary with market conditions. Because the loss-buffer level is not fixed, investors need to fully understand the product structure and risk factors.

Unlike spot ETFs that track bitcoin price rises as-is, PBIT puts more weight on managing profit-and-loss fluctuations than on maximizing returns. Because investment appeal may change depending on the SEC review and future detailed management terms, it is important not to treat the product as principal-protected from the filing stage.