BFJA provides Bitcoin exposure with a 15% downside floor that resets annually each January. It's designed for investors who want crypto allocation but can't stomach Bitcoin's notorious 50%+ drawdowns.
How It Works
The fund holds Bitcoin futures while simultaneously buying put options to create a floor 15% below the starting price each January. This protection comes at a cost — you'll capture less upside than straight Bitcoin exposure. The floor resets annually, meaning if Bitcoin drops 40% in February, you're still protected at -15%, but next January's floor resets based on the new lower price.
Key Features
- Hard floor at 15% annual loss vs Bitcoin's historical 80%+ drawdowns
- January reset timing aligns with annual portfolio rebalancing cycles
- Uses futures and options, avoiding direct crypto custody complexities
Risks
- Options premium drag could cost 10-15% annually in strong bull markets
- Floor only protects within calendar year — multi-year bear markets compound losses
- Bitcoin futures contango can erode returns by 5-10% annually in normal markets
Who Should Own This
Perfect for advisors allocating to crypto for the first time or institutions with strict drawdown limits. If you've been waiting for Bitcoin to 'mature' before buying, this product suggests you're still waiting. The 15% floor makes it palatable for moderate risk portfolios where a 2-5% crypto allocation won't blow up the whole strategy.