What is a digital asset hedge fund? Hong Kong's MaiCapital launches Bitcoin hedged quantitative fund
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What is a digital asset hedge fund? Hong Kong's MaiCapital launches Bitcoin hedged quantitative fund
MaiCapital will continue to manage the "Bitcoin+" fund using its operations and proprietary trading strategies compliant with the regulations of the Hong Kong Securities and Futures Commission.
Navigating Web3 tides with focused insights1. Second Quantitative Hedge Fund: Bitcoin+1 Investment Fund
MaiCapital Limited (SFC CE No.: BMC948), a Securities and Futures Commission (SFC)-licensed asset management firm focused on blockchain and cryptocurrency-related assets, today announced the launch of its second crypto-themed quantitative hedge fund — the Bitcoin+1 Investment Fund — aiming to track or outperform Bitcoin’s price performance across various market conditions.
Following the success of its first cryptocurrency-focused hedge fund, Blockchain Opportunity Fund, which has over 14 months of auditable track record, MaiCapital will continue applying its SFC-compliant operational framework and proprietary trading strategies to manage the “Bitcoin+” Fund. The “Bitcoin+” Fund is only open to Professional Investors.
Joseph Jeong, portfolio manager at MaiCapital, brings 25 years of financial industry experience as a former executive at UBS, Credit Suisse, and Deutsche Bank, and has also founded hedge funds and institutional brokerage firms.
He said: “There are already many passively managed cryptocurrency funds in the market, primarily following a buy-and-hold strategy for Bitcoin. Our Bitcoin+ Fund aims not only to allow investors to gain exposure to Bitcoin's price movements but also to outperform Bitcoin’s market performance over time.”
Press release from MaiCapital
The new fund employs sophisticated quantitative algorithms to optimize investment decisions and invests in instruments related to Bitcoin and other digital assets, including Bitcoin itself, equities, derivatives, and other structured products, synthetically replicating Bitcoin exposure. The fund aims to achieve BTC-denominated returns through technical analysis and risk management.
To strengthen governance, MaiCapital has partnered with globally renowned law firm Sidley Austin as legal advisor for the fund.
Joy Lam, Partner in Sidley Austin’s Hong Kong investment funds practice, said: “With growing interest in Bitcoin, the market is not only seeking more innovative investment products but also increasingly demanding regulated, high-quality investment management solutions. MaiCapital and its Bitcoin+ Investment Fund represent a leading emerging fund management team dedicated to delivering such innovative offerings. We are honored to have collaborated with the MaiCapital team to develop this pioneering product — a first-of-its-kind in Asia.”
Notification of MaiCapital’s launch of Bitcoin quant fund
Asia’s leading digital asset platform OSL has been selected as the fund’s digital asset custodian via its OSL Custody offering. OSL CEO Wayne Trench said: “Funds play a crucial role in the sustained growth of the digital asset industry. As a forward-thinking, SFC-licensed asset manager, MaiCapital can play a pivotal role in advancing Hong Kong and the region’s digital asset ecosystem. We are honored to be chosen as MaiCapital’s digital asset custodian.”
The Bitcoin+ Fund is proud to participate in an ESG initiative, donating a portion of its profits to JA Worldwide, a century-old, world-renowned nonprofit organization that provides youth with employment and entrepreneurship skills.
2. What Is a Bitcoin-Based Quantitative Hedge Fund?
What is a hedge fund: (also known as a risk mitigation fund or arbitrage fund; English: Hedge Fund) refers to a financial fund that uses financial derivatives such as futures and options, combined with financial institutions, for profit-making purposes. Its original purpose was to avoid losses through hedging.
Simply put: it applies hedge fund investment strategies to conduct quantitative hedging trades with Bitcoin as the primary investment target.
The seven major hedge fund investment strategies:
Market Neutral Strategy
Arbitrage Strategy
Directed Placement (PIPE)
Macro Hedging
Long/Short Equity Strategy
Managed Futures
Multi-Strategy
Since the digital currency market operates 24/7 without interruption, and is even more volatile than the stock market, using cryptocurrencies as investment targets allows hedge funds to leverage diversified long/short instruments and exchange tools to enhance product design flexibility and wealth allocation objectives.
Example investment strategies:
Using algorithmic analysis and automated quantitative trading strategies, designing predefined or complex operational models with defined profit-taking and stop-loss ratios, enabling machines to automatically trade Bitcoin. This type of strategy is typically set up for fixed-income investment goals.
When the market faces significant news events, real-time human monitoring and rapid capture of the latest information are required, supported by big data and AI technologies to provide early warnings of potential market-moving developments. Digital currency markets often react more sharply than stock or foreign exchange markets. For example, in China, when financial regulators announce policies to tighten oversight of the cryptocurrency market, substantial volatility ensues — such as the sharp market decline triggered by the joint statement from seven Chinese regulatory bodies, including the PBOC, on September 4, 2017, regarding ICO regulation. In such cases, investment strategies must be adjusted based on whether the event is positive or negative, temporarily halting regular operations and switching to appropriate event-driven response strategies. This adaptive approach forms a rational product design model and structure for hedge funds.
Conclusion
Beyond the algorithmic trading and macro-event hedging strategies discussed above, additional approaches such as technical K-line analysis, arbitrage ("cross-exchange trading"), and futures contracts can be combined into adjustable, customizable, and diversified configurations tailored to different investor risk profiles, ultimately realizing a Bitcoin-focused hedge fund.
Disclaimer: The explanations and analyses regarding Bitcoin hedge funds and Bitcoin hedging investment strategies provided above are solely the personal views of Cheng Wei from the blog "Blockchain New Insights." We welcome discussions on digital asset-related knowledge.
【About MaiCoin Group】
MaiCoin Group is Taiwan’s longest-standing digital asset trading group, founded in 2014, offering cryptocurrency trading services. Its businesses include the MaiCoin platform, AMIS blockchain company, MAX Exchange, and MaiCapital.
About MaiCapital
MaiCapital Limited is a leading alternative asset manager in Hong Kong and a pioneer in applying institutional investment models to the cryptocurrency space. Co-founded in 2018 by Stanford alumni Benedict Ho and Michael Wong — both finance and technology professionals — the firm aims to provide compliant and regulated investment products for investors interested in cryptocurrency-related assets, focusing on delivering returns and investor protection. MaiCapital emphasizes safeguarding investor interests and mitigating counterparty risks associated with crypto-related products.
In August 2018, MaiCapital received approval from the Hong Kong Securities and Futures Commission to operate and utilize various investment tools, including cryptocurrency-related derivatives, to fully pursue the fund’s investment objectives, while keeping direct investments in virtual assets below 10% of the fund’s total asset value. Subsequently, in early 2019, MaiCapital launched its first crypto-themed product, the Blockchain Opportunity Fund. Recently, MaiCapital was awarded the 2020 FinTech Award by Hong Kong Economic Times (ETNET) as an outstanding digital asset investment manager.
About OSL
OSL is Asia’s most comprehensive digital asset platform, providing software-as-a-service (SaaS), brokerage, trading, and custody services to institutional and professional investors. The company offers over-the-counter trading, access to deep liquidity pools, intelligent RFQ-based trading systems, and secure, insured wallets, ensuring asset safety through immediate settlement. OSL is part of BC Group (stock code: 863.HK), a leading publicly listed technology and digital asset company in Asia. BC Group is a globally recognized public company specializing in digital assets, audited by one of the Big Four accounting firms, and fully compliant with industry-leading anti-money laundering (AML) and know-your-customer (KYC) standards.
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