Asset management company Cboe Vest launched the first BTC mutual fund with the promise of protecting investors from losses associated with high volatility.
A number of experts in the crypto industry believe that Bitcoin volatility is a natural process, similar to fluctuations in oil, gold or traditional currencies. Cboe Vest disagrees with this position and has attempted to provide investors with a tool to predict risk rewards. According to the statement of Cboe Vest, the company has developed a new financial product – “Strategy of controlled volatility”.
The strategy will “manage” the volatility of BTC by dynamically changing the ratio of Bitcoin futures to cash position. The statement added that this feature offers the ability to potentially minimize the impact of price dips and delays in market entry.
The objective function is aimed at making a profit and achieving the predicted volatility levels set by the fund manager according to the following scheme:
1. When the volatility of bitcoin is high, the fund reduces its share in bitcoin futures.
2. When the volatility of bitcoin is low, the fund increases its positions in bitcoin futures.
Karan Sood, CEO of Cboe Vest, said:
“The volatility of bitcoin worries many investors. We decided to approach the problem in a new way. The fund is committed to providing access to bitcoin yields and minimizing the impact of drawdowns while ensuring the safety and convenience of the mutual fund. ”
Cboe Vest claims that regardless of the use of bitcoin, interest in the asset as a risk hedging tool and investment product is quite high. In turn, Goldman Sachs experts believe that the increased participation of institutional investors will be the “key” to stabilize the cryptocurrency market.
