Crypto fund to launch BTC and ETH trusts targeting protection against sharp drawdowns

The California-based asset manager Cambrian Asset Management, with about $200 million in assets, will launch actively managed trusts focused on Bitcoin and Ethereum for accredited investors. Their aim is protection against material drawdowns, Bloomberg reports.

The management fee will be 4% of assets under management (AUM), with a minimum investment of $50,000.

The firm plans to organise secondary trading of the trusts within a year.

In an interview with The Block, Cambrian Asset Management CEO Martin Green did not rule out that Cambrian Bitcoin Systematic Trust and Cambrian Ethereum Systematic Trust could be made available to retail investors after the firm receives regulatory approval.

The trusts’ investment mandate does not contemplate short positions or leverage. When bearish signals are formed, the managers will either sell the underlying asset or use derivatives to hedge the position.

The firm said that their quantitative-investing strategies have reduced the year-to-date maximum drawdown of their flagship product, which is based on 50 cryptocurrencies, by more than 70% versus purchasing without hedging. Over this period the vehicle delivered 76% to investors, while Bitcoin rose 62%. The strategies are based on 100 billion market-data indicators; the crypto fund uses leverage.

Earlier reports indicated acquisitions of Grayscale Investments’ Bitcoin Trust (GBTC) shares by US Global Investors, Miller Opportunity Trust, Morgan Stanley and Wealthfront.

In June Grayscale Investments added 13 additional assets to the list, under which it may in the future offer new investment trusts to clients.

In September the SEC registered Grayscale’s BCHG, ETCG and LTCN trusts.

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