BlackRock’s proposed Bitcoin ETF would hold no Bitcoin or spot ETF shares

BlackRock filed with the SEC on Oct. 19 for the iShares Bitcoin Managed Protection ETF (PBIT), a fund that would hold options and fixed-income securities and gain Bitcoin exposure through derivatives.The preliminary prospectus excludes direct Bitcoin and spot Bitcoin ETP holdings. The securities cannot be sold until the registration statement becomes effective.Money that enters PBIT could reach Bitcoin through the dealers on the other side of its options.The filing registers the proposed fund under the Investment Company Act of 1940, and the prospectus describes three overlapping long call-spread tranches with staggered monthly starts, with one tranche typically replaced each month.Each tranche would buy calls with a strike near 90% of the reference asset's value, which gives roughly 10% initial exposure to declines before fees, and sell higher-strike calls that cap gains.Fixed-income holdings supply income and some loss mitigation. The 80% investment policy counts qualifying fixed-income holdings used to implement the strategy, so it describes an asset mix and leaves Bitcoin exposure per dollar undefined.Where demand could reach BitcoinDealers who sell PBIT's options could hedge b...