Maximise Returns, Minimise Risk: The Power of Zerocap’s Bearish PPN

Hedge and profit from downside in crypto assets – with 90% capital protection.

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*For wholesale investors only

We are excited to introduce our newest product, the Bearish Principal Protected Note (PPN) – providing a unique opportunity for investors or crypto holders anticipating a potential decrease in Bitcoin’s price. 

Macroeconomic uncertainty continues to loom with a potential global recession and ongoing inflationary concerns across traditional markets, and regulatory concerns in the US for digital asset firms, These may be short to medium-term catalysts for prices to fall across a multitude of asset classes.

With this PPN, you can participate in the total downside performance of Bitcoin, while maintaining a 90% protection level on your capital. This means the maximum possible loss is limited to just 10% of your initial investment. 

Our Bearish PPN can be a short-term hedge for your crypto portfolio by overlaying this strategy on top of your long-term holdings. Your net portfolio positioning after full implementation would mean you are protected from downside moves in the crypto markets – with your entire portfolio still benefiting from any move greater than 10% higher.

This strategic tool can also be beneficial as a hedge against your traditional equity portfolios. As crypto has much higher volatility than other asset classes, the downside moves have historically been greater than traditional asset classes, and therefore return more when used as a hedge (short) against your portfolio.

A modicum of risk management in the crypto space can lead to much better risk-adjusted returns.

Consider an investment of $50,000 in our Bearish PPN. If Bitcoin’s price falls below the Strike Level at the product’s expiry, you could stand to gain from that drop as you are short the market. But if the price of Bitcoin increases, your risk is capped – you can only lose a maximum of 10% of your initial investment. This is what makes our Bearish PPN not only a great hedge but also a smart risk versus reward payoff for those with a short-term view that markets may fall.

Here’s our payoff structure from Bearish Principal Protected Note with 90% Protection:

This product suits investors who expect the underlying price of Bitcoin to be below the Strike Level at the expiry date. It’s important to note that the payout amount is not linked to the value of Bitcoin at any time other than the observation dates.

This is yet another testament to our commitment towards revolutionizing the digital asset investment space. Our Bearish PPN is one of the many unique, tailored financial solutions Zerocap offers. We provide a wide range of potential investment strategies, tailored to suit different market conditions and investor expectations.

To learn more about the Bearish PPN and how it can fit into your investment strategy, don’t hesitate to reach out to our expert investment team.

Disclaimer

This material is issued by Zerocap Pty Ltd (Zerocap), a Corporate Authorised Representative (CAR: 001289130) of AFSL 340799. Material covering regulated financial products is issued to you on the basis that you qualify as a “Wholesale Investor” for the purposes of Sections 761GA and 708(10) of the Corporations Act 2001 (Cth) (Sophisticated/Wholesale Client). This material is intended solely for the information of the particular person to whom it was provided by Zerocap and should not be relied upon by any other person. The information contained in this material is general in nature and does not constitute advice, take into account the financial objectives or situation of an investor; nor a recommendation to deal. Any recipients of this material acknowledge and agree that they must conduct and have conducted their own due diligence investigation and have not relied upon any representations of Zerocap, its officers, employees, representatives or associates. Zerocap has not independently verified the information contained in this material. Zerocap assumes no responsibility for updating any information, views or opinions contained in this material or for correcting any error or omission which may become apparent after the material has been issued. Zerocap does not give any warranty as to the accuracy, reliability or completeness of advice or information which is contained in this material. Except insofar as liability under any statute cannot be excluded, Zerocap and its officers, employees, representatives or associates do not accept any liability (whether arising in contract, in tort or negligence or otherwise) for any error or omission in this material or for any resulting loss or damage (whether direct, indirect, consequential or otherwise) suffered by the recipient of this material or any other person. This is a private communication and was not intended for public circulation or publication or for the use of any third party. This material must not be distributed or released in the United States. It may only be provided to persons who are outside the United States and are not acting for the account or benefit of, “US Persons” in connection with transactions that would be “offshore transactions” (as such terms are defined in Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”)). This material does not, and is not intended to, constitute an offer or invitation in the United States, or in any other place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or invitation. If you are not the intended recipient of this material, please notify Zerocap immediately and destroy all copies of this material, whether held in electronic or printed form or otherwise.
 Disclosure of Interest: Zerocap, its officers, employees, representatives and associates within the meaning of Chapter 7 of the Corporations Act may receive commissions and management fees from transactions involving securities referred to in this material (which its representatives may directly share) and may from time to time hold interests in the assets referred to in this material.  Investors should consider this material as only a single factor in making their investment decision.

FAQs

What is Zerocap’s Bearish Principal Protected Note (PPN)?

Zerocap’s Bearish Principal Protected Note (PPN) is a unique investment product that allows investors to participate in the total downside performance of Bitcoin, while maintaining a 90% protection level on their capital. This means the maximum possible loss is limited to just 10% of the initial investment.

How can Zerocap’s Bearish PPN serve as a hedge for a crypto portfolio?

Zerocap’s Bearish PPN can serve as a short-term hedge for a crypto portfolio by overlaying this strategy on top of long-term holdings. This means that the portfolio is protected from downside moves in the crypto markets, with the entire portfolio still benefiting from any move greater than 10% higher.

How can Zerocap’s Bearish PPN be used as a hedge against traditional equity portfolios?

Zerocap’s Bearish PPN can also be beneficial as a hedge against traditional equity portfolios. As crypto has much higher volatility than other asset classes, the downside moves have historically been greater than traditional asset classes, and therefore return more when used as a hedge (short) against a portfolio.

What is the risk versus reward payoff for Zerocap’s Bearish PPN?

With Zerocap’s Bearish PPN, if Bitcoin’s price falls below the Strike Level at the product’s expiry, investors could gain from that drop as they are short the market. But if the price of Bitcoin increases, the risk is capped – investors can only lose a maximum of 10% of their initial investment. This makes the Bearish PPN a smart risk versus reward payoff for those with a short-term view that markets may fall.

Who are the ideal investors for Zerocap’s Bearish PPN?

Zerocap’s Bearish PPN suits investors who expect the underlying price of Bitcoin to be below the Strike Level at the expiry date. It’s important to note that the payout amount is not linked to the value of Bitcoin at any time other than the observation dates. This product is particularly suitable for investors looking for a unique, tailored financial solution to suit different market conditions and investor expectations.