Stay in Crypto for Greater Returns, Quant Fund Kbit Advises Investors
Quantitative fund Kbit believes that greater returns lie within the digital asset space itself as hedge funds turn to traditional strategies like the basis trade to capitalize on the recent surge of crypto ETFs.
“The larger opportunities, higher return opportunities are in the crypto native markets,” said Ed Tolson, founder and CEO of Kbit, during a recent interview.
Tolson emphasized the importance of engaging with centralized crypto exchanges and trading various crypto instruments, including tokens, perpetual swaps, and derivatives.
Kbit manages assets exceeding $100 million and employs a market-neutral trading strategy.
This approach aims to profit from both rising and falling prices while minimizing overall market risk.
The firm, based in the British Virgin Islands, also functions as a market maker.
Tolson declined to disclose the fund’s performance, citing client confidentiality.
In traditional markets, hedge funds utilize the basis trade to exploit price discrepancies between an asset and its corresponding futures.
While hedge funds are deploying tried-and-true strategies to profit from the recent influx of US Bitcoin and Ethereum ETFs, quantitative fund Kbit says sticking within the digital asset world will prove to be more lucrative https://t.co/kuK9rSKGCA
— Bloomberg Crypto (@crypto) July 26, 2024
With the launch of Bitcoin and Ether ETFs, these funds have begun applying the same strategy, buying ETFs and shorting Bitcoin futures on the CME.
However, Tolson pointed out that this approach is more profitable when executed with native crypto instruments, such as buying spot crypto and shorting perpetual swaps.
Unlike standard futures contracts, perpetual swaps have no expiration date and are available exclusively to non-US
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