Wave Financial Launches Yield Fund Based On Cryptocurrency Derivatives

October 1, 2019 | Digital Assets, Investments, News

Wave Financial is addressing the fast-developing interest in options strategies in the cryptocurrency sector with its Wave Bitcoin (BTC) Income and Growth Digital Fund.

The Wave Financial fund will hold reserves of Bitcoin (BTC) in the custody of Fidelity Digital Assets. The fund will generate income by earning premiums from selling call options on the fund’s BTC reserves with strikes 20% or more above the current BTC trading price. Moreover, this options strategy also leaves room for investors to earn some potential BTC upside, said the company.

Wave Financial: Investors love innovative yield capturing strategies

“For high net worth investors, appetite for innovative yield product with upside potential is strong,” said Benjamin Tsai, President of Wave Financial. “This product monetizes higher volatility of BTC to deliver yield, independent of the interest rate environment while keeping some upside exposure.”

Wave intends to distribute a monthly dividend of 1.5% of Net Asset Value per month. Further, any excess above an annual distribution of 18%, minus performance fees, will go towards the purchase of more BTC.

Meanwhile, cryptocurrencies options will be in the limelight once CME Group starts offering options on bitcoin futures in early 2020.

Bitcoin $100,000? Grab a call option

In July this year US regulated derivatives exchange LedgerX offered a unique call option. The option would be in the money if bitcoin rose to $100,000 by December 2020.

“Dozens and dozens of these institutions got back to us saying we’d be interested in trading a contract like this,” said LedgerX Chief Executive Officer Paul Chou to Bloomberg. “I understand $100,000 is a large number, but a lot of us who’ve been in this space remember Bitcoin at $1, and then it hit $10 and $100 and $10,000. A $100,000 contract doesn’t even make us blink.”

However, BTC is currently trading at only $8,378.

Wave Bitcoin (BTC) Income and Growth Digital Fund Fee Structure

Finally, the new Wave Financial fund will levy management fees of 100 basis points. However, it will charge a performance fee of 30% of returns over and above the 18% yield.

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Latest Alternative Investment News

Artificial Intelligence: AMD Takes On Rivals In The AI Chip Sweepstakes
December 7, 2023     Artificial Intelligence, News

Chipmaker AMD (NASDAQ: AMD) has unveiled a range of innovative AI solutions spanning from data centers to personal computers. The AMD Instinct MI300 Series features data center AI accelerators, while…

Digital Assets: Robinhood Debuts Crypto Trading On Its App In The EU
December 7, 2023     Digital Assets, FinTech, News

Robinhood (NASDAQ: HOOD) has launched its Crypto app in the European Union (EU), allowing eligible customers to engage in crypto trading with the added incentive of earning Bitcoin rewards. Customers…

FinTech: Samsung Electronics Ties With Mastercard’s Wallet Express
December 7, 2023     FinTech, News

Samsung Electronics (KRX: 005930) and Mastercard (NYSE: MA) have partnered to launch the Wallet Express program, offering banks and card issuers a cost-effective way to expand digital wallet offerings. Through…

Venture Capital: Revaia, Europe’s Biggest Female-Led VC Firm, Racks Up $160M For Second Fund
December 7, 2023     ESG and Sustainability, News, Venture Capital

Revaia, Europe’s largest female-founded venture capital firm, has successfully raised €150 million ($160 million) for its second fund, Revaia Growth II. The funding was secured from sovereign wealth funds, family…