Exploiting Bitcoin's Volatility

Every advisor in the world gets inundated with various types of solicitous emails; funds, private placements, whatever is faddish, "got five minutes?" and so on. Occasionally, I will try to learn a little about what is being pitched as was the case earlier this week. 

The chart compares it to other alts that we look at regularly for blogging purposes and it seems like in generally falls in line with the other alts in terms of returns and volatility profile and like the other alts, it helped in 2022, it was down 1.30%. 

GLIFX is the Lazard Global Listed Infrastructure Fund and the chart compares it to three infrastructure themed ETFs. Part of the pitch for GLIFX is being defensive and the result appears to be similar to GII and TOLZ. PAVE is a client holding and it looks nothing like GLIFX and the others. Is PAVE a better fund than the others? No. GLIFX, GII and TOLZ seek a different outcome tilted more to utilities which tend to have lower volatility and are less cyclical which offers the opportunity to be defensive. PAVE tilts to the materials which is more cyclical and not necessarily defensive in a downturn.

Different objectives. We regularly talk about having the correct expectations for what a holding should do and this is a great example. GLIFX appears to be alt-ish and if correct, it gets that effect from a differentiated source of returns compared to other alts we look at which is always interesting.

This is happening on Wednesday;

IBIT is the iShares Bitcoin ETF. I thought the income blast suite paired synthetic long the underlying with selling put spreads but this says covered call so we'll see. I had a conversation on Twitter on Tuesday with a couple of folks and one of my comments was that on some level, exploiting the volatility is an intriguing idea. 

And kind of related, Calamos will be listing three Bitcoin buffer ETFs on October 7th. They will have symbols CBTO, CBXO and CBOO. Where a big part of the Bitcoin story for those who aren't necessarily true believers is the asymmetric potential, I don't know what capping the upside makes any sense. For anyone concerned about the volatility, just own less. If it turns out that CBTO, CBXO and CBOO offer some sort of interesting effect not necessarily related to Bitcoin's asymmetry then we can take a look then.

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