Cypto asset investment platform Zerocap has launched a new fund, Zerocap Smart Beta Bitcoin, with the aim of effectively managing and reducing Bitcoin’s high volatility and price swings.
The objective of Smart Beta Bitcoin is to reduce and balance risk while improving risk adjusted returns, while providing exposure to Bitcoin for investors, ZeroCap said.
Zerocap chief investment officer Jonathan de Wet said the fund will deliver Bitcoin’s acknowledged benefits to investors, diversification and non-correlation to other asset classes, a hedge against inflation, and Bitcoin’s long-term record of value appreciation.
“We want to deliver better, safer vehicles for digital asset investing,” he said.
“The number one concern of investors is Bitcoin’s high volatility and entry point, no matter when you enter it delivers an outsized portfolio impact.
“Zerocap Smart Beta Bitcoin solves this problem by balancing timing risk while providing risk adjusted returns.”
Zerocap’s head of trading Toby Chapple added that the product allows investors to control the downside risk of their investments, while having all the statistical benefits that the asset class offers to a portfolio approach to investing.
“The problem affecting many sophisticated investors is how do you place a volatile instrument into a portfolio to gain its intrinsic non-correlation and return benefits, without overshadowing the existing statistical profiles of your current investments?” Chapple said.
“Having an asset class that trades at approximately seven times the swings of equity investments needs consideration before placing into a portfolio.
“Based on traditional investment banking techniques developed to cure hedge fund risk profiles, Smart Beta Bitcoin uses a proprietary and rigorous methodology to redistribute risk regularly between Bitcoin and a cash equivalent digital asset to accurately control the swings in the price of Bitcoin to a predetermined level.”
In October last year, Zerocap’s bitcoin ventures were sponsored by The Victor Smorgon Group (VSG).
“Our world leading custody and regulated investment products provide an access point that our investors are comfortable and used to, and we couple this with the only product in the Australian market whose custody is insured by Lloyds of London,” Zerocap chief executive Ryan McCall said.
“Our OTC desks have passed $1 billion in notional volume, providing our investor base with world leading execution abilities.
“Our sophisticated product range is providing additional ways for investors to have thoughtful and bespoke crypto products. suited to their needs and in a familiar format.”
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