Managed Investment Scheme
Aus Merchant Investments
Actively Managed Fund
The Fund’s investment mandate is to invest in ‘base layer’ digital assets as well as other decentralised finance protocols and alternate cryptocurrency assets. During a bearish divergence, the fund will employ staking and liquidity providing as a primary source of returns.
Bitcoin is an open-source cryptocurrency and worldwide payment system, It is a decentralised digital currency, which operates without any central authority. The Bitcoin network is a peer-to-peer network under which transactions take place between users without an intermediary. Each transaction is verified by a decentralised network of nodes performing cryptographic computations and recorded in a public, distributed ledger (i.e. a blockchain), which allows for a transparent record of transactions and superior settlement times to traditional payment methods. Bitcoin is regarded as a ‘scarce digital asset’. The total supply of Bitcoins is limited to 21,000,000.
Ethereum is an open-source, public blockchain-based distributed computing platform and operating system featuring smart contract functionality. Ether is the native token to the Ethereum blockchain. It is the dominant platform for decentralised applications, and has been selected by the Investment Committee to form part of the Fund’s Investment Strategy as a result of its relative dominance in decentralised financial applications.
Staking and Providing Liquidity
The manager will use staking protocols through various decentralised finance platforms to earn yield on held digital assets. The manager will also actively invest and manage liquidity provider positions with a focus on stablecoin pools that are not subject to liquidation or impermanent loss. The manager will utilise the majority of funds under management in this manner with the aim of generating significant returns in the midst of a bearish divergence in the cryptocurrency market.
The Fund will enter into various trading strategies that involve leverage, including by borrowing crypto assets and utilising margin trading accounts. The maximum level of leverage in the Fund at any time is limited to three times. In addition to the ‘base layer’ protocols, the Manager may invest in tokens native to ‘middleware protocols’. Middleware protocols powering open financial systems are comprised of decentralised exchanges, credit markets, staking services, oracles and derivatives (both of crypto assets as well as synthetic, non-blockchain indexes and commodities).
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