Building upon our goal to become the single destination for investors to get their desired exposure to digital assets, Arca is expanding our investment product offerings by introducing new strategies and vehicles designed to encompass a wide variety of investor risk profiles. We weigh several factors in our investor-first approach to designing and launching our asset management products, including:
- The maturity of the digital assets ecosystem
- Investor sophistication and knowledge about digital assets
- Regulatory clarity
This product has been a long time coming
In 2018, we launched our first product, an actively-managed hedge fund, designed to give sophisticated investors research-based exposure to a quickly evolving asset class. At that time, the asset class was immature with few asset managers addressing the space in ways consistent with how traditional investors expect fiduciaries to act. It became clear to us that in an asset class as young and fast-moving as digital assets, there was a tremendous amount of value that could be offered through active management accompanied by risk management, compliance, and security efforts. We also believe that we were early to the asset class, and therefore spent nearly as much time explaining and demystifying digital assets as we did create and managing the actual hedge fund strategy. As we approach our third anniversary, we are proud to say the fund has outperformed all indexes by a substantial margin after fees and expenses, and we have introduced this asset class to hundreds of new investors. Further, there is still a tremendous amount of value to be added through active management and we have identified and developed several new, differentiated strategies that we will be launching soon.
Bitcoin remains unique, but no longer requires active management.
That being said, there are certain assets in this ecosystem that are unique based on their size, value proposition, and other attributes. Bitcoin is one of these assets whose value is determined by its limited supply and its narrative as a replacement to fiat currency. It is also the oldest and arguably the most well-known digital asset. Its price in dollars is dictated by supply and demand factors and is much more sensitive to macro-economic factors than other digital assets. Similar to other more mature assets (gold, large-cap equities, etc.), we believe there is less value to be added through active management. Our clients tend to have a broad range of theses, various goals, and wildly varying allocation plans, but our clients agree that they want to express their Bitcoin investment in a low-cost, liquid and – ideally - safe manner.
Additionally, our sophisticated investors now have a strong understanding of Bitcoin and are developing their own allocation strategies. These views are very specific to each investor and have a high degree of variance – there is no one-size-fits-all Bitcoin allocation. Some of our investors have no desire for any type of exposure to Bitcoin, while others think Bitcoin is very important. Therefore, we think it’s important for our clients to control their Bitcoin allocation as much or as little as they want, and have it directed by them.
However, it is expensive and complicated for institutional investors to acquire, store and manage their Bitcoin exposure on their own. Most of our clients are institutions and act as fiduciaries for other investors, and therefore have higher standards of risk management, custody, liquidity, and demand that Bitcoin be delivered at the lowest fee structure possible. In order to meet these needs, the Arca Accredited Investor Bitcoin Trust offers daily liquidity and what we consider to be low minimums and low fees.
Our Mission? Remain Laser-Focused on providing the right products to the right investors at the right time.
With the continued growth of our active and passively managed products, Arca’s vision is to become a multi-product asset manager that strives to offer investors an appropriate way to achieve their digital asset investment goals – from risk-adjusted after-fee returns to constantly improving investor experience-driven innovation. As we continue to launch and manage multiple new strategies through a variety of vehicles, our core values will stay the same across each and every one. In addition to striving to offer impressive risk-adjusted returns, our products have been designed to meet the operational, compliance, legal and regulatory standards needed for sophisticated investors to gain exposure to digital assets. These include:
- Actively managed funds for digital assets using techniques that are not well understood by traditional investors
- Passive vehicles that provide access for investors to make their own decisions as they become more sophisticated and educated
- Blockchain transferred funds (BTFs) that incorporate blockchain technology into traditional investment vehicles to provide the next generation of asset management products.
Please inquire with the Arca Investor Relations team if you are interested in investing.
To learn more or talk to us about investing in digital assets and cryptocurrency call us now at (424) 289-8068.