Crypto Investment Specialist Launches Zerocap Smart Beta Bitcoin
A risk balanced fund for Bitcoin investing and exposure
Melbourne, 15 February 2022: Drawing on their extensive traditional asset management sector experience and background, specialist crypto investment management firm Zerocap has developed and launched a new fund to enable investors to effectively manage and reduce Bitcoin’s high volatility and price swings – Zerocap Smart Beta Bitcoin.
Zerocap managers will deploy proprietary models that rebalance the high volatility of Bitcoin to lower levels, in line with risk profiles of equity portfolios. The objective of Smart Beta Bitcoin is to reduce and balance risk while actually improving risk adjusted returns, all while providing exposure to Bitcoin. Similar risk parity strategies are common and effectively deployed in other asset classes, and Zerocap believes this risk parity and risk reduction approach is well suited to Bitcoin, given its ingrained volatility and high risk characteristics.
Zerocap’s 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. 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. The Fund will deliver low volatility Beta making it easier for investors to include Bitcoin in their overall portfolio and investment strategies, while gaining the considerable upsides of digital asset exposure,” he said.
Zerocap’s Head of Trading Toby Chapple said “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? 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. The product allows investors to control the downside risk of their investments whilst having all the statistical benefits that the asset class offers to a portfolio approach to investing.”
Zerocap CEO Ryan McCall said, “Zerocap is committed to breaking down the barriers to entry for sophisticated investors to digital assets. Bitcoin’s price swings and overall falls in 2022 so far have once again highlighted its inherent volatility, making the availability of Zerocap’s Smart Beta strategy particularly appropriate.
“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. 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.”
Zerocap’s mantra is zero friction, borderless finance.
Zerocap is Australia’s only full-service crypto platform, providing tailored investment products and secure custody to a global client base of wholesale investors, HNWs and family offices, and institutions.
Zerocap creates bespoke solutions for investors to build and diversify their investment portfolio with digital assets, through a range of regulated and direct exposure products across the volatility spectrum to fit with their desired levels of investment and risk.
Zerocap’s people bring a deep understanding of digital asset technology, trading, and portfolio optimisation, having processed a billion dollars of digital assets for private investors, family offices and institutions. Zerocap has assembled a team of blockchain experts, institutional portfolio managers and advisers, and experienced traders; backed by strong regulatory, compliance, security and reporting functions.
Zerocap provides market leading institutional grade custody and storage facilities backed by insurance policies for all of its investors, utilising best-in-class technology such as MPC cryptography and hardware isolation.