Protecting Bitcoin Gains - While Staying Invested

Protecting Bitcoin Gains — While Staying Invested

Bitcoin has increasingly become part of the modern portfolio conversation.

Blockchain adoption continues to expand. Institutional investors are increasing participation. Advisors are incorporating Bitcoin into diversified portfolios. And clients continue asking how to gain exposure responsibly.

Investors are drawn to the asset class for several reasons:

• Limited supply and digital scarcity

• Growing institutional acceptance

• Integration into traditional financial markets

• Potential hedge against currency debasement policies

But alongside that opportunity comes significant volatility. Even strong long-term trends can experience sharp corrections.

As we moved into early 2026, we recognized that volatility could increase. Rather than leaving clients fully exposed to another potential drawdown, we sought a way to help protect against additional losses while allowing them to remain invested and potentially recover recent declines more efficiently if markets rebounded.

To accomplish that, we worked directly with JP Morgan to structure a custom 3-year solution tied to the iShares Bitcoin Trust (IBIT), designed exclusively for our clients. The structure introduced defined downside parameters while providing 1.2x upside participation, meaning gains could compound at an accelerated rate during a recovery, subject to a capped return.

Key Terms of the Investment

• Underlying: iShares Bitcoin Trust (IBIT)

• Issuer: JP Morgan

• Pricing Date: February 5, 2026

• Initial IBIT Price: $36.10

• Term: 3 Years

• Downside Protection: 100% principal protection for the first 40% decline in IBIT at maturity

• Upside Participation: 1.2x leveraged upside

• Maximum Return: 193.15% if IBIT rises significantly over the investment period

This structure allows investors to stay exposed to potential Bitcoin upside while introducing a meaningful buffer against moderate declines.

Why This Structure Can Be Valuable

For investors who already hold Bitcoin or Bitcoin ETFs, volatility can create a difficult decision: remain exposed to potential drawdowns or reduce exposure and risk missing a recovery.

This structure provides a third approach.

By linking the note to IBIT while adding defined downside protection, investors can maintain exposure to the asset class while improving the risk profile of that exposure. The enhanced upside participation can also help accelerate recovery if Bitcoin rebounds following periods of weakness.

For investors looking to initiate or expand a Bitcoin allocation, this type of structure can also provide a more disciplined entry point compared with purchasing the asset outright.

Important Considerations

Investors should understand the specific characteristics of this structure:

• Returns are capped at 193.15% over the 3-year term

• Downside protection applies only at maturity and only for the first 40% decline

• If IBIT declines more than 40% at maturity, losses would begin beyond that threshold

• The investment is subject to the credit risk of JP Morgan as issuer

• Liquidity prior to maturity may be limited

• This is a debt security linked to IBIT, not direct ownership of Bitcoin or the ETF

Each structured note has its own terms, risks, and payoff profile. Careful review of the offering details is essential before investing.

Final Thought

The rapid evolution of digital assets is creating new opportunities — but also new challenges for investors trying to balance growth potential with responsible risk management.

Innovative investment structures like this allow investors to participate in emerging asset classes like Bitcoin while introducing greater discipline around risk. As institutional adoption continues to grow, thoughtful portfolio construction will play an increasingly important role in how investors incorporate these assets into long-term strategies.