Introducing Marex’s Volatility-Adjusted Strategy
London-based financial services platform Marex has launched a volatility-adjusted strategy for investors looking to navigate the high price turbulence in the crypto market. The strategy focuses on bitcoin, ether, and the dollar index futures (DXY) and aims to provide exposure to crypto while mitigating volatility.
Key points:
– The strategy consists of equal weights of bitcoin and ether, with DXY futures acting as a hedge.
– The basket is consistently rebalanced to maintain an annualized volatility target of 8%.
– When volatility rises, exposure to risk assets (BTC, ETH) is reduced, and exposure to DXY is increased.
– The strategy leverages the safe-haven appeal of DXY and the risk asset behavior of bitcoin and ether.
– Marex highlights that this is the first institutional-grade FX and crypto volatility-targeted strategy.
Marex’s research suggests that the strategy, with DXY as a hedge asset, would have generated a return of 29% between Jan. 1, 2021, and June 30, 2023, outperforming traditional buy-and-hold strategies.
Your Hot Take
Marex’s volatility-adjusted strategy offers a promising solution for investors seeking exposure to crypto while managing volatility. By leveraging the hedge potential of DXY futures and the risk asset behavior of bitcoin and ether, the strategy aims to maintain stable net volatility exposure. This innovative approach demonstrates the growing demand for more sophisticated investment strategies in the crypto market.
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