Superstate Launches Bitcoin and Ethereum Carry Fund

For cryptocurrency traders, there has long been an arbitrage opportunity in the spread between the price of Bitcoin in the futures market—which is generally more bullish—and the price in the spot market. The problem is that taking advantage of this sector of finance, known as cash-and-carry or basis trading, requires a lot of time and attention. That’s why Superstate, a cryptocurrency company that specializes in tokenizing conventional financial services, has created its new Crypto Carry Fund that allows high net worth investors to gain exposure to spot and futures market spreads in the form of an Ethereum ERC-20 token.

Superstate was founded by Robert Leshner, a former banker who is highly regarded in the crypto world, to building complexone of the first and most successful DeFi platforms. In an interview with Fortune, Leshner said that some sophisticated investors have for years earned a yield premium on the opportunity to arbitrage the spot and futures prices of cryptocurrencies. But by creating a token to perform the transaction, he said, Superstate has made the process more accessible — and also more liquid since traders will be able to swap the tokens — known as USCCs — with each other.

Super-State raised $14 million Crypto Carry Fund launched its first fund in early 2024, offering tokenized versions of familiar products like Treasuries. The new Crypto Carry Fund will primarily invest in Bitcoin and Ethereum arbitrage opportunities but, during periods when spreads are not an issue, will instead place investors’ money in Treasuries and other safe investments. Unlike hedge funds, there are no lock-ups and returns will be available daily.

Superstate co-founder Jim Hiltner said the new Superstate fund would charge clients a 75 basis point fee, adding that it was a better deal for investors than seeking exposure to crypto carry trades through hedge funds, which charge a so-called twenty two Hiltner also said the fund is structured so that it is not vulnerable to margin calls and will have a cash buffer in any event.

The biggest problem for most investors is that the new fund is only open to qualified buyers with $5 million in assets, while the minimum purchase amount is $100,000. Superstate’s founders hope that over time, the assets will become more widely available, but for now, the new fund is revolutionary because it is fully compliant with current U.S. regulations.

From a broader perspective, SuperState is at the forefront of a growing sector of the cryptocurrency industry that is looking to tokenize conventional assets. While companies, including banks, have been interested in the idea of ​​“real-world assets” on the blockchain for years, the idea finally seems to be gaining momentum as Wall Street fully embraces cryptocurrency. Indeed, traditional financial giants are making efforts, including Goldman Sachswho says he will launch three tokenization projects by the end of the year.

Leshner notes that SuperState’s first fund has already accumulated $100 million in assets, and that some big names in traditional finance will soon join a recently launched fund. Industry Council dedicated to the tokenization of real-world assets.

“We’re getting exactly the success we wanted,” Leshner says. “Even more important than assets under management is that intermediaries like prime brokers are interested in cryptocurrencies.”

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