BlackRock Seeks Options-Based Bitcoin Fund With Built-In Loss Buffer as IBIT Inflows Jump

BlackRock has filed with the SEC to launch a Bitcoin fund that would trade some upside for limited downside protection, using options on its IBIT product. The filing landed the same day IBIT took in $665.2 million after two weeks of ETF selling.

A Bitcoin fund built on options rather than coins

According to Decrypt and Cointelegraph, BlackRock submitted a filing on Monday for a new fund, the iShares Bitcoin Managed Protection ETF, carrying the proposed ticker PBIT. Cointelegraph described the document as a preliminary prospectus submitted to the US Securities and Exchange Commission. The Block framed the product as BlackRock's third bitcoin fund, offering downside protection alongside upside exposure to IBIT.

Unlike BlackRock's flagship product, PBIT would not own Bitcoin or Bitcoin ETF shares directly. Decrypt reported that it would hold call options on IBIT or similar Bitcoin exposure, and would sell calls at higher prices to offset part of that cost. Decrypt added that the portfolio would include fixed-income holdings that generate interest, and that the filing leaves the management fee blank.

How the three-tranche buffer is meant to work

The fund would be divided into three tranches that overlap, each beginning in a different month. One tranche would expire and a new one would begin each month, according to Decrypt. Protection for each tranche would typically apply once the reference asset has fallen to roughly 90% of its value, so early losses are held to around 10% before fees.

The upside side of the bargain is less certain. Decrypt reported that market conditions when a tranche begins determine its gain cap, and that the fund manager may adjust both the cap and the protection level at its own discretion. Cointelegraph quoted BlackRock's warning that the fund "does not provide a fixed Tranche Protection Start Value, Floor or Tranche Cap Value," and read that as a sign investors could face larger losses than the headline buffer suggests.

In general terms, a buffer fund gives up part of the potential gain in return for a cushion against early losses. Selling higher-priced calls is how the structure finances that cushion. Decrypt added that the product would fall under the Investment Company Act of 1940 and sit within the iShares Trust, and that this law covers most mutual funds and ETFs.

The numbers behind the filing and Monday's flows

Decrypt paired the filing with fund-flow data from SoSoValue, which showed a sharp reversal on the same day.

• IBIT took in $665.2 million on Monday and was the only one of 12 US spot Bitcoin ETFs to post net inflows.
• Fidelity's FBTC lost $83.6 million and Grayscale's GBTC lost $54.9 million, leaving total net inflows of $526.6 million.
• The funds shed about $910 million over the prior two weeks, made up of $228.6 million last week and $681.1 million the week before.
• As of Friday, the group's flows for October stood at roughly negative $615 million.
• Cumulative net inflows since the January 2024 launch of the funds total $57.4 billion, with net assets of $105.46 billion.

Where the outlets agree and where they diverge

Decrypt and Cointelegraph agree on the core structure: options tied to IBIT, three tranches and a roughly 10% initial loss target before fees. Both cite Bloomberg Intelligence analyst James Seyffart, who counted PBIT as BlackRock's third Bitcoin ETF filing and noted that Calamos, First Trust and Innovator already offer similar buffered Bitcoin funds. Decrypt also relayed Seyffart's view that a BlackRock move into this area tends to attract considerable attention.

The outlets give different net asset figures for IBIT. Decrypt cited $66.37 billion, attributing it to SoSoValue, while Cointelegraph reported $65.7 billion as of Monday, attributing it to BlackRock. Neither outlet explains the gap, which may reflect different data providers or timing.

The flow headlines also measure different things. A Cointelegraph link to related coverage describes the $527 million fund-wide total as the biggest showing since September. The Block's headline says IBIT's $665 million was its highest since October 2025. The Block's summary attributes to Min Jung, an associate researcher at Presto Research, the view that some investors may be preparing for a "catch-up trade" in bitcoin. Only the headline and summary of that report were available, so its reasoning is not covered here.

BlackRock's growing crypto lineup, and what it still lacks

Cointelegraph traced the sequence of launches. IBIT arrived in January 2024, followed by the spot Ether fund ETHA in July of that year, which now has $8 billion in net assets. The iShares Staked Ethereum Trust ETF, which adds staking rewards, came in March 2026, and the iShares Bitcoin Premium Income ETF, built to generate income through options, followed in June.

PBIT would be the third Bitcoin product and would add a loss-limiting strategy to a lineup of two Bitcoin and two Ether funds. Decrypt noted that BlackRock still offers crypto products only for Bitcoin and Ethereum. ETF Store president Nate Geraci wrote on X on Monday that he was surprised BlackRock has not launched spot funds for SOL, XRP or HYPE, and said the firm appears committed only to Bitcoin and Ether for now. Readers who follow assets beyond those two can check what is being added to new Solana tokens listed today on Coinvote.

Why a protected Bitcoin product matters to holders

The filing arrives after a stretch of selling that Decrypt linked to hotter-than-expected inflation data and renewed bets on another Federal Reserve rate hike. Against that backdrop, a product that states its loss limit up front addresses a concern the ETF flow data has shown over recent weeks. The sources do not say that demand for protection motivated the filing, so that link remains an inference.

For investors, the practical difference from IBIT is the trade-off. IBIT holds Bitcoin and moves with it in both directions. PBIT would hand back part of any rally in exchange for a defined cushion, and that cushion resets with each monthly tranche rather than staying fixed.

Open questions to watch

Several terms remain blank or flexible. The management fee is blank, the gain cap is tied to market conditions when each tranche opens, and BlackRock retains latitude to adjust both the cap and the protection level. Anyone considering the product can read the prospectus closely to see how those terms are set and disclosed, and how fees affect the roughly 10% buffer.

The sources do not report a launch date or any SEC response to the filing. It also remains an open question whether Monday's inflows mark a lasting change after the October outflows or a single-day move. Decrypt's figures showed the month still negative through Friday, before Monday's inflow was counted.

Market snapshot

Asset	Price	24h	7d	Market cap
Bitcoin (BTC)	$81,442	-0.9%	-2.5%	$1.64 trillion
Ethereum (ETH)	$2,382	-1.3%	-5.1%	$291.01 billion
XRP (XRP)	$1.29	-0.5%	-5.0%	$81.63 billion
Hyperliquid (HYPE)	$78.10	-1.1%	-4.8%	$17.37 billion

CoinGecko data as of 2026-10-20 (UTC); DeFi TVL from DefiLlama: Ethereum $49.48 billion, Solana $5.87 billion.

On Coinvote

• New Solana Tokens Listed Today: 3,692 projects tracked, 42 new listings in 7 days, 1,205 community votes today.
• Best Solana Meme Coins Today: 2,410 projects tracked, 24 new listings in 7 days, 552 community votes today.
• New Ethereum Tokens Listed Today: 2,926 projects tracked, 1 new listing in 7 days, 51 community votes today.
• Best Ethereum Meme Coins Today: 256 projects tracked, 0 new listings in 7 days, 2 community votes today.

FAQ

What is BlackRock's PBIT Bitcoin ETF?

PBIT is the proposed iShares Bitcoin Managed Protection ETF, which BlackRock filed with the SEC on Monday. It would use options linked to IBIT rather than holding Bitcoin directly, seeking downside protection in exchange for capped gains.

How much protection would PBIT offer?

Each tranche would typically begin protecting once the reference asset has dropped to roughly 90% of its value, which holds early losses near 10% before fees. BlackRock cautioned that the protection level and gain cap are not fixed, so outcomes can vary.

How much did IBIT take in on Monday?

According to SoSoValue data reported by Decrypt, IBIT took in $665.2 million on Monday. It was the only one of 12 US spot Bitcoin ETFs with net inflows, and total net inflows for the group were $526.6 million.

Sources

• Decrypt: BlackRock Files for 'Buffer' Bitcoin ETF as IBIT Draws $665M in a Day (2026-10-20)
• Cointelegraph: BlackRock files for third Bitcoin ETF, still no Solana or XRP (2026-10-20)
• The Block: BlackRock’s IBIT Bitcoin ETF draws $665 million inflow, highest since October 2025 (2026-10-20)
• The Block: BlackRock files for bitcoin ETF offering downside protection and upside exposure to IBIT (2026-10-19)
• CoinGecko (market data), DefiLlama (TVL), Coinvote listing and vote data