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introduction:
The innovative investment product Bitcoin Volatility Premium AMC quickly became the largest actively managed Bitcoin-only financial product in Europe and the second largest in the world. Despite this accomplishment, his Bitcoin-only AMC has so far received no attention or media coverage. What makes this investment product offering particularly interesting is that its dramatic rise is due to his $50 million seed investment, launched in 2010 from a mysterious early Bitcoin miner. The product is designed to curb Bitcoin’s volatile prices and promote its adoption as a trusted medium. exchange.
What is AMC?
AMC stands for Actively Managed Certificate. This is a type of structured security popular in Europe. Jurisdictions such as Luxembourg and Jersey allow asset management companies to create these certificates in order to raise funds from investors. Certificates provide a “wrapper” around an investment strategy or specific underlying asset. The certificates are sold to investors and the funds are used to implement the strategy.
Who is the mysterious whale?
In response to inquiries regarding the identity of the new Bitcoin whale Bitcoin Volatility Premium AMC, Zeltner & Co. confirmed that the seed investors are indeed early Bitcoin miners who have been involved in Bitcoin since 2010, but investors who want to protect their privacy and avoid public scrutiny. Zeltner & Co. declined to provide further details. their identity. The motivation behind such a significant move by individuals holding large amounts of Bitcoin is particularly interesting. The creation of this AMC, aimed at stabilizing Bitcoin prices, demonstrates a strategic approach to digital asset management. By personally allocating its holdings to the development of this investment product, Bitcoin Whale not only addresses the issue of Bitcoin’s volatility, but also increases its viability as a stable medium of exchange. This AMC stands out as a unique market-shaping vehicle that not only seeks risk management, but also differentiates itself through an operational approach that targets a more stable and predictable Bitcoin market.
Why is this AMC relevant?
The Bitcoin Volatility Premium AMC is already the largest actively managed Bitcoin-only financial product in Europe and the second largest globally after the Purpose Investments Bitcoin Yield ETF (BTCY), with a total value of C$109 million (80.750 USD). There are several large Bitcoin ETFs that actively manage futures positions, such as ProShares Bitcoin Strategy ETF (BITO), which has over $2.82 billion in assets under management. However, these are not actively managed funds in the traditional sense. Futures ETFs aim to track the price of Bitcoin on a one-to-one basis, rather than trying to outperform or optimize the risk/return of investing directly in Bitcoin.
The difference between ETFs and AMCs is that ETFs are passively managed. In other words, it tracks the underlying asset. AMC, on the other hand, is actively operated. This means that it seeks to outperform the underlying asset in either absolute return or risk-adjusted return.
Figure 1: Largest active Bitcoin-only funds and structured products
How is its investment strategy unique?
The certificate invests algorithmically in Bitcoin and the US dollar, aiming to recover the volatility premium while optimizing the risk and return profile by investing directly in Bitcoin. This strategy provides liquidity to the BTC/USD spot market through market making on major exchanges such as Kraken. This can result in small profits, accumulating between 2% and 6% per year depending on volatility. Volatility premiums are generated when the market moves from filling algorithmically generated buy orders to filling sell orders, or vice versa. This algorithm buys low and sells high at each dip or peak.
Figure 2: Risk Profile of Bitcoin and Zeltner’s Bitcoin Volatility Premium
Similar to ETFs, as more investors invest in Bitcoin Volatility Premium AMC Certificates, the certificates will need to buy more Bitcoins, thus increasing the demand for Bitcoins and It already exceeds the newly created daily supply by several factors. For market making, we aim for an allocation of 70% Bitcoin and 30% USD. This means that the strategy currently owns over 540 Bitcoins.
Market impact and future outlook:
Bitcoin Volatility Premium AMC’s goal is to mitigate Bitcoin’s price volatility and make Bitcoin more stable as a medium of exchange.
Dr. Demelza Hays, Portfolio Manager at Zeltner & Co., shared the following insights with Bitcoin Magazine Pro:
“Bitcoin’s potential to become a global medium of exchange and currency depends largely on its ability to achieve stable purchasing power. Currently, the inherent volatility in Bitcoin’s price is widespread in everyday transactions. However, once Bitcoin’s value stabilized, it emerged as a viable alternative to traditional fiat currencies and was decentralized by Bitcoin scaling solutions such as Liquid, AQUA, and Lightning Network. It may offer benefits such as increased flexibility, security, and reduced transaction costs.”
AMC is Europe’s largest actively managed Bitcoin-only financial product and a major player globally, leveraging algorithmic strategies to invest in Bitcoin and the US dollar. This strategy aims to profit from market volatility, which influences Bitcoin demand and price trends.
Swiss Family Office Involvement:
The strategy is managed by Zeltner & Co., a prestigious family office based in Zurich, Switzerland. Founded by Thomas Zeltner, Seltner & Company continues the legacy of Thomas’ father, the late Jürg Zeltner, former president of UBS Wealth Management. Seltner & Company, known for its discretion and expertise in wealth management, has given credibility to the business and solidified confidence in the soundness of the strategy and the potential for success.
Regulatory and geographical advantages:
AMC chose Zurich, Switzerland, as its headquarters, benefiting from the region’s favorable regulatory environment and reputation as a global financial and innovation hub. This strategic location makes Bitcoin Volatility Premium AMC safer and more attractive for investors looking to diversify into digital assets.
Conclusion:
The launch of the Bitcoin Volatility Premium AMC comes at a time of heightened interest in Bitcoin, which recently surpassed all-time highs and attracted the attention of institutional investors and mainstream media. As the market continues to mature and institutional investor participation increases, the emergence of innovative investment vehicles like this certificate highlights the evolving nature of digital asset management.
