Hedgeye Launches HBIT ETF with Options-Based Risk Management Strategy

Hedgeye Asset Management has launched its first product, the Hedgeye Hedged Bitcoin ETF (HBIT), on the New York Stock Exchange. HBIT offers regulated crypto exposure by holding US-listed spot Bitcoin ETPs like BlackRock's iShares Bitcoin Trust and overlaying options strategies.

The actively managed fund can change positioning daily, buying puts and writing calls based on Hedgeye's Risk Range signals to earn premium and potentially reduce drawdowns. However, it will differ from holding Bitcoin due to fees, derivative exposure, and the potential for capped upside.

HBIT starts with no operating history and carries key-person and options-liquidity risks, so its net impact on adoption and Bitcoin price depends on whether hedging offsets costs and surrendered gains.

The fund primarily invests in exchange-traded products that track Bitcoin, including BlackRock's iShares Bitcoin Trust. It then buys and writes put and call options, using strike prices informed mainly by Hedgeye's proprietary Risk Range signals.