CryptoFund to launch BTC and ETH trusts with a view to reducing the risk of sharp corrections
California-based asset management company Cambrian Asset Management, with $200 million in assets, will launch actively managed bitcoin and Ethereum trusts aimed at accredited investors. Their aim is to protect against significant drawdowns, Bloomberg writes.
The management fee will be 4% of the AUM, with a minimum investment of $50,000.
The firm plans to arrange secondary trading of the trusts after a year.
In an interview with The Block, Cambrian Asset Management CEO Martin Green did not rule out Cambrian Bitcoin Systematic Trust and Cambrian Ethereum Systematic Trust becoming available to retail investors once the firm receives regulatory approval.
The investment declaration of the trusts does not involve the use of short positions and leverage. If a bearish signal is formed, managers will either sell the underlying asset or use derivatives to hedge the position.
The company said that the quantitative investing strategies used have reduced the maximum drop in their flagship product, based on 50 cryptocurrencies, by more than 70% since the beginning of the year compared to buying them without hedging. During this period, the structure has returned 76% to investors, while bitcoin is up 62%. The strategies are based on 100bn of market data and the crypto fund uses leverage.
As a reminder, Grayscale Investments (GBTC) previously announced the acquisition of bitcoin trust shares from US Global Investors, Miller Opportunity Trust, Morgan Stanley and Wealthfront.
In June, Grayscale Investments listed 13 additional assets on which it may offer new investment trusts to clients in the future.
In September, the SEC registered Grayscale's BCHG, ETCG and LTCN trusts.
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