IDX advisors have launched a US mutual fund product offering aiming to provide investors with risk-managed exposure to Bitcoin Futures.
The Bitcoin strategy fund will trade under the BTCDX ticker, but will operate on paper as a Mutual Fund – the first time this has been done for a BTC financial product in the United States.
Mutual Fund status is an attractive notion in the eyes of IDX Advisors, with the regulatory framework for mutual funds enabling close management of the contract roll as well as the ability to close the fund to new investors at any given point.
The BTCDX will commit to more than 50% of fund exposure being committed to Bitcoin Futures in normal market conditions.
This comes amid a tide of Bitcoin Futures ETF projects, which differ in having very passive management strategies more closely tied with Bitcoin indexes.
Why trade BTC futures in a mutual fund?
The bespoke managed risk approach could be attractive to investors keen to gain portfolio exposure to Bitcoin, but reluctant to risk their cash in the tricky volatility of crypto markets – however, they lack the liquidity afforded by the new ETFs.
In comments to the press, Ben McMillan – IDX’s Chief Investment Officer, explained that professionally managed risk taking advantage of coy leverage could boast impressive returns.
“This is very different than a static, long-only exposure, which we believe does not make sense for many investors,” he explained
“We designed this product mainly for institutional investors and fiduciaries that are very risk-conscious and are looking for what we believe is prudent exposure to the asset class”.
The news comes as the Van Eck Bitcoin Futures ETF is approved, a testament to the sheer demand from investors in the space, explained IDX CEO Andrew Swan.
“The excitement around the rapid development of blockchain technologies, mixed with the realisation of accommodative monetary stimulus policies, increasing geo-political tensions, and materialising concerns over inflation growth, all have investors seeking exposure to asset classes such as digital assets,” explained Swan.
“Specifically, investors and advisors are expressing a strong appetite for digital assets exposure, but desire a risk-managed approach that focuses on mitigating the inherent volatility and drawdowns common with the emerging asset class; this is what IDX seeks to provide.”
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