Investment management firm Cboe Vest Financial announced today the launch of a new mutual fund that offers exposure to Bitcoin. The new fund, the Cboe Vest Bitcoin Strategy Managed Volatility Fund, will purportedly protect investors from the wild volatility associated with BTC prices by adopting a new approach.
If the price of Bitcoin records high volatility, the Fund will decrease its exposure to Bitcoin Futures. However, if Bitcoin price volatility is low, the Fund increases its exposure to Bitcoin futures. Bitcoin futures are investment products that allow investors to speculate on the future price of Bitcoin, without buying the underlying asset.
“By actively adjusting allocations to Bitcoin futures and cash, the Fund aims to provide exposure to Bitcoin with less volatility,” today’s announcement noted. The fund manager believes this approach will “minimize the impact of drawdowns and poor market timing while improving risk-adjusted returns.”
Put simply, the fund would remain profitable or record reduced losses even if the price of Bitcoin drops significantly.
Based in McLean, Virginia, Cboe Vest Financial had $2.2 billion in assets under management (AUM) in Q1 2021. The firm primarily invests in cash and cash equivalents and manages most of its funds in discretionary accounts. By offering exposure to Bitcoin, the company would be looking to attract new clients, offering competition to other more crypto-focused fund managers such as Grayscale and Bitwise.
Karan Sood, CEO of Cboe Vest, said regarding their new product,
Investors have been eager for access to Bitcoin, and until very recently were challenged to access Bitcoin returns in a brokerage account. However, the cryptocurrency’s volatility has been concerning to some investors. We set out to solve those issues, in a novel way.
Bitcoin is trading around $46,100 at the time of writing, having hit the $48,000 mark during the weekend. The leading cryptocurrency has an $866 billion market capitalization and looks on track to reclaim the $1 trillion mark in the coming months.
