Zerocap launches bitcoin fund

Yasmine Raso

Senior Journalist

16 February 2022

Cryptocurrency investment management firm, Zerocap, has announced the launch of its Smart Beta Bitcoin fund that allows investors to manage and reduce their exposure to Bitcoin’s volatility and price swings.

The Smart Beta Bitcoin fund aims to reduce and balance risk from exposure to Bitcoin while improving risk-adjusted returns. This is achieved by Zerocap’s proprietary model that rebalances the high volatility of Bitcoin to match the lower levels of risk in equity portfolios.

Jonathan de Wet, Chief Investment Officer of Zerocap, said the fund will deliver the benefits of Bitcoin to investors – including diversification, a hedge against inflation, long term value appreciation and non-correlation with other asset classes – without taking on much of the associated risk.

“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,” he said.

“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.”

Toby Chapple, Head of Trading at Zerocap, said the fund seeks to resolve the problem of investors who desire the return benefits of a volatile investment without harming the existing profiles of current investments.

“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,” he said.

“Zerocap is committed to breaking down the barriers to entry for sophisticated investors to digital assets,” Ryan McCall, CEO of Zerocap said.

“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.”