Following the launch of ALPHA BTC multi-strategy fund in January 2023, the fund has launched its delta hedged version ALPHA USD in March 2023 for investors that want USD returns without being exposed to BTC volatility.
Both ALPHA BTC and ALPHA USD have the same underlying strategies in their portfolios, both trade the same contracts on the same markets and both hold about 70% of capital in cold-storage custody. The significant difference is that ALPHA USD trading margin, held on inverse contracts in BTC, is delta hedged into synthetic USD.
This has generally three effects: firstly the invested capital is no longer exposed to BTC volatility, secondly it denominates returns into USD and thirdly it can slightly change returns and performance ratios. For quick comparison, below are their close to identical equity curves in their respective BTC or USD denominations. Details are for review in their respective portfolio decks available at https://www.hedge.capital/funds.
Source: Hedge Capital, ALPHA BTC in unit BTC terms, Alpha USD returns in unit USD terms
ALPHA BTC is for investors that want both exposure to BTC and earn more of that BTC. No matter if they measure returns in BTC or recalculate them to USD, they are net long BTC as they hold it in the margin.
ALPHA USD is for investors that do not want exposure to BTC by holding it and want to earn more USD. A typical use case is an investor seeking higher USD returns than are available in equity markets but dislikes BTC volatility, a crypto investor that seeks returns for his USD capital aside of his crypto investments or a BTC miner that wants to decrease opportunity cost of hedging his BTC production to USD.
ALPHA USD is opened for subscriptions in USDC.