Wave Financial recently announced the first fund based on market crypto derivatives. Named Wave BTC Income & Growth Digital Fund, the fund will seek return through the sale of cryptoassets calls (purchase options).
Calls will be sold at a strike price of 20% above the market price. In addition, it will distribute dividends equivalent to 1.5% of the value of bitcoins held in the wallet, which should result in an annual income of 18%.
The custody of the fund will be made by Fidelity Digital, the cryptoassets branch of the traditional investment firm Fidelity Investments.
The idea of the fuind is to capture part of a new product market in the cryptocurrency environment. For example, the growth of crypto derivatives platforms.
How Wave’s fund for crypto derivatives will work
The fund will charge a rate of 100 points-year base as administration fee and will receive 30% of all returns above 18% income, putting the remainder back in the fund.
It is open for fundraising, but there are still no confirmed investors. “We have several investors who have expressed interest. We are working to get the private placement memo and subscription contract”, said Ben Tsai, Wave Financial partner.
More and more managers are going in the direction of funds based on cryptocurrencies. A survey made by PanoramaCrypto identified about 300 active hedge funds with some participation in cryptoassets.