Is Cryptocurrency Arbitrage Profitable? Superstate launches tokenized arbitrage fund USCC

This site (120bTC.coM): Superstate, a blockchain-focused asset management company, launched the Cryptocurrency Arbitrage Fund (Superstate Crypto Carry Fund, code: USCC), a tokenized fund that utilizes Bitcoin The price difference between the spot and futures markets of Bitcoin and Ethereum is used to conduct "basis arbitrage trading".

USCC’s trading strategy

USCC’s main trading strategy is to use the price difference between the spot and futures markets of Bitcoin and Ethereum to conduct “basis arbitrage trading”, while adding

• Ethereum staking income

• Cash is invested in the yield of U.S. Treasury bonds

to increase the fund’s income. And by providing the option to issue USCC as an ERC-20 token on the Ethereum blockchain, qualified investors will also be allowed to use it for mortgage or settlement in the future, thereby enhancing its benefits.

What is arbitrage trading?

The reason why Bitcoin ETFs were previously reported to have continuous net inflows but not to rise is that many hedge funds use the basis arbitrage strategy (cash-and-carry strategy or basistrading) to buy Bitcoin ETFs and sell Bitcoin futures contracts to conduct arbitrage trading.

Arbitrage trading is a common trading method for hedge funds and institutional traders. They use the pricing differences between assets and their corresponding derivatives to earn price differences with minimal risk. If the position is large, they can earn considerable profits Gains are particularly prevalent in financial products that are less mature or have fewer competitors.

General investors often face challenges when implementing this strategy, including establishing connections to multiple counterparties and exchanges, margin requirements, and consistent position monitoring to manage volatility. Because of these difficulties, this strategy is highly profitable in the crypto market, and Superstate saw the need and launched this fund.

Superstate is actively launching tokenized products

Superstate emphasizes that USCC is a strictly regulated product and complies with US securities laws. Spot assets are held by custody partner Anchorage Digital and are in bankruptcy isolation. Unlike traditional hedge funds that charge high management and performance fees, USCC only charges a fixed management fee of 0.75% and provides daily liquidity, unlike hedge funds that typically offer 30-day or quarterly redemptions.

Robert Leshner, the founder of Superstate, is also the co-founder of the old lending agreement Compound. The previously launched Superstate Short-term U.S. Government Bond Fund (USTB), with a current asset management scale of US$94.13 million, provides qualified buyers with investment in short-term Treasury bills. The tokenization fund is also currently striving to become a partner of MakerDAO.

The above is the detailed content of Is Cryptocurrency Arbitrage Profitable? Superstate launches tokenized arbitrage fund USCC. For more information, please follow other related articles on the PHP Chinese website!