Investment firm Calamos is hedging its bets on a new class of Bitcoin exchange-traded funds designed to weather the cryptocurrency's notorious volatility.

Latest developments: Calamos says its protected Bitcoin ETFs are attracting inflows even as spot Bitcoin ETFs see redemptions.

Matt Kaufman, head of ETFs at Calamos, said the firm saw roughly $10 million to $15 million in inflows over the past several weeks.

Kaufman said advisors are increasingly looking for Bitcoin exposure that reduces volatility and downside risk.

The firm offers three versions of its protected Bitcoin ETFs, including products with full downside protection and others with 10% or 20% downside risk.

“You can get upside of Bitcoin with no downside risk,” Kaufman said.

Kaufman joined CoinDesk's Jennifer Sanasie on Public Keys.

How it works: Calamos structures the products using Treasuries and options tied to Bitcoin-linked indexes.

Kaufman said the firm allocates roughly 90% of assets into Treasuries to build downside protection.

The remaining budget is used to buy Bitcoin-linked call spreads through FLEX options.

Calamos created its own Bitcoin-linked index and listed FLEX options tied to that index after the launch of spot Bitcoin ETF options.

The products are offered in quarterly structures as well as laddered versions designed for model portfolios.

What advisors are asking: Wealth managers are becoming more sophisticated in how they evaluate crypto exposure.

Kaufman said advisors previously focused on whether Bitcoin belonged in portfolios at all.

Now, advisors are asking how to improve risk-adjusted returns and portfolio construction using crypto exposure.

Calamos positions its products as alternatives to traditional portfolio allocations, including broad equities, bonds and cash.

Kaufman said some investors are moving from cash-like products into fully protected Bitcoin ETFs tied to Bitcoin performance but without downside exposure.

Reading between the lines: The crypto ETF market is evolving beyond simple spot exposure.

Kaufman said the industry is increasingly dividing crypto ETF strategies into three categories: protection, income and growth.

Calamos previously launched auto-callable income ETFs and is exploring additional crypto-related strategies.

Other ETF issuers have focused on generating yield from Bitcoin volatility through options-based products.

“You don’t just have to sit in the spot vehicle anymore and ride out those waves,” Kaufman said.

What comes next: Calamos expects Bitcoin volatility to remain a defining feature of the asset.

Kaufman said he expects Bitcoin to revisit previous highs despite recent market turbulence.

He argued Bitcoin’s volatility profile creates opportunities for structured products and options-based strategies.

“I think we’re going higher,” Kaufman said.