John Koudounis, President and CEO of Calamos Investments, appeared on CNBC’s ‘Closing Bell Overtime’ to discuss managing risk in cryptocurrency investments, particularly through a new Bitcoin product. Koudounis explained that the product was launched to address the high volatility of Bitcoin, providing an opportunity for both new investors scared of market swings and current investors unsure about Bitcoin’s peak performance. The product aims to offer a risk-managed approach to Bitcoin investment.
The new investment tool Calamos introduced guarantees 100% downside protection with a cap on the upside at around 11.5% for a one-year holding period. This means investors could potentially gain up to 11.5% if Bitcoin’s value increases, while being assured of getting their principal back if the market falls. Koudounis clarified that this protection is immediate and not contingent on market performance over time, as the product uses zero-coupon treasuries and options traded on the CBOE Bitcoin index.
Further, Calamos is set to launch additional products with varying levels of protection, including a 90% protected ETF with a cap rate around 30% and an 80% protected option where investors could lose up to 20% but potentially gain over 50%. These offerings cater to different risk appetites, from those seeking no loss to those willing to take on some level of risk for higher potential returns.
When questioned about the popularity of these products, Koudounis suggested that the appeal would vary based on investor risk tolerance. He believes retirees might lean towards the fully protected product, while others might prefer options with higher potential returns and slightly more risk. He also indicated that these products are not just for retail investors but could attract institutional interest as well.
In broader market context, Koudounis commented on the current economic climate, suggesting that the new administration’s pro-business stance has fostered optimism, leading to market growth. He echoed sentiments from Davos, highlighting a global perception of the U.S. leading in economic growth, driven by a less regulatory environment that encourages business activities. This perspective aligns with recent market trends and the bullish outlook many are adopting for U.S. assets.
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