Hedgeye Launches HBIT ETF With Options-Based Bitcoin Risk Strategy

Hedgeye Asset Management has launched the Hedgeye Hedged Bitcoin ETF under the ticker HBIT on the New York Stock Exchange. According to the August 27 launch announcement, the actively managed fund combines exposure to US-listed spot Bitcoin products with a changing options overlay.

HBIT does not hold Bitcoin directly

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.

HBIT can change its positioning as frequently as once per day. The manager says the process considers price trends, market and implied volatility, liquidity and the firm’s calculated trading ranges. Unlike a defined-outcome ETF, the product has no fixed twelve-month term or stated permanent cap on upside.

Options may reduce losses but introduce new risks

Premium earned from writing options can offset part of the cost of downside protection. However, written calls can limit participation during a Bitcoin rally, while purchased protection may expire without value. The fund also warns that its hedging techniques may not offset losses and that some options may lack a liquid secondary market.

The launch adds a risk-managed structure to a market where institutional holdings of spot products continue to grow. JPMorgan recently reported a larger stake in Bitcoin ETFs, while BlackRock has lowered the minimum required for in-kind IBIT conversions.

The fund begins without an operating history

HBIT is a newly organized fund, and Hedgeye Asset Management is also a newly formed adviser. Investors therefore do not yet have a live performance record showing how the options process behaves through different Bitcoin market cycles.

The product’s returns will also differ from holding Bitcoin because it owns other funds, pays operating expenses and uses derivatives. HBIT offers another route to regulated Bitcoin exposure, but its success will depend on whether active hedging reduces drawdowns enough to compensate for option costs and potentially surrendered gains.

The prospectus also identifies key-person risk because production of the daily Risk Range signals depends heavily on one individual. Hedgeye says another employee can publish a replacement calculation, but the substitute formula is not identical. That dependency adds operational risk beyond the Bitcoin and options exposure inside the portfolio.