Introducing the Zerocap Principal Protected Note for Bitcoin

Principal Protected Notes

A Principal Protected Note (PPN) is a financial instrument that returns the principal amount invested at maturity regardless of the underlying assets price movement. An investor will also receive a percentage of the upside benefit of price appreciation of the underlying asset – whilst mitigating downside price risk with the full principal returned if the price decreases below the strike level at the expiry of the term.

Solving downside and timing dilemas, whilst participating in the upside return profile

Popular in traditional finance, PPNs were created by investment banks to limit the downside exposure of investing in volatile assets whilst allowing for participation in the upside of the underlying asset.

Due to its inherent price volatility, Bitcoin and digital currencies can experience significant downside risk to investor’s principal capital. This creates large timing and drawdown risk to investors looking to enter the space. Zerocap’s PPN looks to solve this investment dilemma.

Zerocap is proud to be the first digital asset firm to offer the world’s first crypto asset PPN.

How can a PPN be applied in Cryptocurrency?

Zerocap breaks down the barriers of entry for clients, enabling them to access readily available products that are yet to be offered for institutions in digital assets.

For years, investors have been turned away by the volatility present in cryptocurrency. Returning your principal capital, whilst still having the ability to tap into the upside return profile of Bitcoin is an excellent risk return trade off, especially given macro and geopolitical uncertainties that are currently present.

Referencing the above payoff table, investors participate in 0.50c for every $1 price increase in Bitcoin from 50,000 BTC up to a cap of 100,000 BTC. The participation ends at a 100% move in Bitcoin. Any decrease below the strike level of $50,000 BTC and the principal is returned when the note expires.

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Trading Team Leadership

Toby Chapple

Toby Chapple has an extensive background in tier 1 investment banking and hedge funds at Managing Director level. He has held senior trading positions across proprietary trading and asset management including running the proprietary trading desk at Deutsche Bank that focused on fixed income, currency and commodity markets, senior portfolio manager roles at stand alone global macro hedge funds including Sequoia and Deutsche Bank. Toby also designed and was global head of sales and trading for the Deutsche Banks Hedge Fund Replication suite of products. Prior to joining Zerocap Toby was in charge of $1 billion in investments within UBS.

William Fong

William has over two decades of investment and treasury management experience from globally recognised institutions, in roles including Acting Global Head of EM FX at Westpac, Head of Capital Markets Advisory at Ernst & Young, Director of Macro Proprietary Trading at Deutsche Bank and Director of Macro Portfolio Management at Sparx group of Japan. His previous experience also includes HSBC, Citibank and Maybank of Malaysia. He excels in local and international financial markets, following onshore experiences in Hong Kong, Seoul, Shanghai, Singapore, Sydney and Melbourne, and across Head Trading and Director roles in global macro, emerging markets, and balance sheet management. William currently pursues a PhD in global capital markets at Swinburne University of Technology.

Leo Shek

Leo has over twenty years of financial markets experience dealing with a multitude of asset classes and clients, leading and originating numerous large-scale and reputable Asian capital markets deals in the debt markets area, as well as cross-border M&A and financing transactions. Before joining Zerocap, he held several senior management positions such as Director of Relative Value Group for Deutsche Bank, Director of Debt Capital Market at Standard Chartered, Executive Director of Corporate Solutions at CIBC and Deputy Head of Corporate Sales at Lehman Brothers.

Paul Tulloch

With over eight years of experience as a derivatives trader, Paul has managed portfolios of various option strategies. Before joining Zerocap, he managed derivatives under Optiver in equity ETO’s, warrants, ETFs and futures across APAC, European and US markets.

Questions?

If you have questions about the Zerocap PPN or any one of our products, feel free to reach out to the team at [email protected] and through our phone numbers 1800 ZEROCAP (Australia) or +61 3 9491 8256 (International).

About Zerocap

Zerocap has exceptional experience and expertise navigating the digital realm. Employing in-house counterparty risk and credit analysis models, Zerocap takes on counterparty risk involved in our offerable notes for clients.

Phenomenal growth in the institutional cryptocurrency space has allowed us to provide this exciting instrument to our clients. Our investment team and Wealth Platform offer frictionless access to digital assets with industry-leading security. To learn more about our Bitcoin Principal Protected Note and other products that we offer, contact the team at [email protected].

FAQs

What is a Principal Protected Note (PPN)?

A Principal Protected Note (PPN) is a financial instrument that guarantees the return of the principal amount invested at maturity, regardless of the price movement of the underlying asset. Investors also receive a percentage of the upside benefit of price appreciation of the underlying asset, while downside price risk is mitigated with the full principal returned if the price decreases below the strike level at the expiry of the term.

How does Zerocap’s PPN work?

Zerocap’s PPN allows investors to participate in the upside return profile of Bitcoin while protecting their principal capital. Investors participate in 0.50c for every $1 price increase in Bitcoin from 50,000 BTC up to a cap of 100,000 BTC. The participation ends at a 100% move in Bitcoin. Any decrease below the strike level of $50,000 BTC and the principal is returned when the note expires.

What is the benefit of Zerocap’s PPN?

Zerocap’s PPN provides an excellent risk-return trade-off, especially given the macro and geopolitical uncertainties currently present. It allows investors to tap into the upside return profile of Bitcoin while protecting their principal capital from the downside risk.

Who are the leaders of Zerocap’s trading team?

Zerocap’s trading team is led by Toby Chapple, William Fong, Leo Shek, and Paul Tulloch. They bring a wealth of experience from globally recognized institutions and have held senior management positions in investment banking, hedge funds, and financial markets.

How can I contact Zerocap for more information about their PPN?

If you have questions about the Zerocap PPN or any one of their products, you can reach out to the team at [email protected] or through their phone numbers 1800 ZEROCAP (Australia) or +61 3 9491 8256 (International).

Disclaimer

This document is issued by Zerocap Pty Ltd (Zerocap), an Authorised Representative (#001289130)  of Garnet Capital Pty Ltd (Garnet) AFSL 340799. This document is made available to you on the basis that you are a Wholesale or Professional Investor. This document is not intended for retail clients nor should it be distributed to retail investors. This document has been prepared for information purposes only and may not be relied on for any other purpose (including, without limitation, as legal, tax, financial or investment advice). Nothing in this document should be interpreted as an endorsement or recommendation of a particular investment or strategy. Any opinions expressed are general in nature and do not consider the objectives, financial situation or needs of any person. Before making an investment decision you should conduct your own due diligence, consider what is suitable for you and your personal circumstances and obtain your own independent advice. Zerocap Pty Ltd (Zerocap) makes no representation or warranty (express or implied) that any information contained in this document is accurate or complete. Information included in this document is based on matters as they exist as of the date of preparation of this document and will not be updated or otherwise revised. Certain statements reflect Zerocap’s views, estimates, opinions or predictions which may be based on proprietary models and assumptions, and there is no guarantee that these views, estimates, opinions or predictions are currently accurate or that they will be ultimately realised. There are significant uncertainties inherent in the forward-looking statements included in this document. Neither historical returns nor economic, market or other indications of performance should be considered as an indication of future results or performance. Investing in cryptocurrencies and/or digital assets involves a substantial degree of risk and could result in the loss of the entire amount invested. Nothing in this document is intended to imply that investing in cryptocurrencies and/or digital assets may be considered “conservative”, “safe”, “risk free”, or “risk averse”.
You should be aware that dealing in products that are leveraged carries significantly greater risk than non-leveraged products.  As such, you could both gain and lose larger amounts.  You may even sustain losses well in excess of your initial deposit and also in excess of the margin required to establish and maintain any positions in the leveraged products.  Accordingly, you should carefully consider whether leveraged products are appropriate for you in light of your financial circumstances and risk profile.