Wave Financial announced it has launched the Wave BTC Income & Growth Digital Fund. This is the first crypto derivatives-based yield fund available to investors. This is according to a recent press release published a few days ago.
Fidelity To Provide Custody For Bitcoin Derivatives
Wave Financial is launching a new crypto derivatives-based yield fund for investors in the market. According to Ben Tsai, the managing partner of Wave Financial they consider that the crypto market needed a lot of traditional types of investment products.
It is worth mentioning that Fidelity Digital Assets, another company trying to offer solutions to the crypto market, is going to be offering custody for the fund.
Basically, the firm wants to attract investors to a new market of yield products in the cryptocurrency space. As reported by CoinDesk, the Wave fund is expected to be generating a monthly income with the premium from selling call options.
David Siemer, the CEO of Wave, explained that the mission of the company is to provide investors with diversified exposure to crypto assets. This would also work as an alternative way to have exposure to Bitcoin, the largest cryptocurrency in the market.
This fund is going to be charging 100 basis points of fixed management annually. Furthermore, it will take 30% of returns above 18 percent yield. Although the fund is already open to investors, no interested party confirmed to subscribe.
According to Samuel Lee, a financial advisor at SVRN Asset Management, skilled investors are expected to be performing better than less-skilled players.
On the matter, he commented:
“They are a very new asset class whose market is not very efficient. Skilled investors are going to make a lot more advantage of those who are less skilled in such markets when compared to more mature equity and fixed income markets.”
The fund considers that focusing too much on yield would also risk meeting monthly income targets. However, this could also be an opportunity. Lee considers that the more inefficient the market is, the more mispricing there is going to be.”
A few weeks ago, Elementus, a startup that focuses on spotting illicit transactions in digital currencies, announced they were raising $3.5 million from a fund that is linked to Fidelity Investments.
There are other companies offering services to traditional investors. One of them is Bakkt that has recently launched Bitcoin futures contracts that are backed by physical Bitcoins.