Invemo is an asset manager, broker and liquidity provider in the digital asset market targeting both professional and institutional clients. To meet the demand of professional and institutional investors, it has developed a low-risk fixed income investment product that outperforms long-term appreciation of Bitcoin.
Background and Concept
The high volatility of the digital asset market has always been and continues to be one of the major factors preventing professional and institutional investors from opening their portfolio to it. In addition, it still lacks efficiency compared to traditional markets which enables the development of market-neutral trading strategies that can provide stable income with minimal market risk. Due to the fact that the primary digital asset (Bitcoin) is often described as digital gold, investors are keen not only to benefit from market volatility but also to have the performance measured in the underlying asset that is disregarding appreciation of the asset itself.
As a result of such demand, Invemo has developed the first fixed income Bitcoin investment product in Switzerland that enables fixed income to be earned on Bitcoin holdings with the lowest risk profile of 20% ARR and 2% maximum . pull down. The primary target of such an investment is to increase the amount of Bitcoin in the portfolio while ignoring the increase or decrease in the portfolio’s value due to the appreciation of the underlying asset. Such an investment approach enables a focus on the long-term appreciation of assets while at the same time producing an alpha that can be withdrawn as a dividend or reinvested in the portfolio. The investment product can be compared to a Bitcoin bond or fixed income debt tool except for the fact that Invemo enables investors to hold money on their accounts that avoids the default risk.
Investment Strategy and Method
The investment strategy is based on a market neutral approach and leverages the statistical arbitrage opportunities in the futures market with the same underlying asset and different expiry dates. Such an approach enables the reduction of market risk and a stable return on investment by focusing on the forward curve spread. Depending on the risk appetite of the investor, it is possible to adjust the risk-reward ratio. The strategy is fully algorithmic implemented by advanced in-house trading software.
Installation and Security
Invemo is a licensed asset manager in Switzerland and enables it to manage separate investor portfolios when using third parties for fund and custody deposits. Invemo is currently accepting investor deposits through Sygnum Bank and Globitex in the use of Copper as a custody solution that enables investors to hold cash in cold storage while accessing institutional-grade liquidity and instruments. Invemo investors have complete control and oversight of trading activity on their accounts as well as accessing daily liquidity.
Featured image: (From left) Trond Henninen, Partner and Algorithmic Trader at Invemo and Maxim Zimin, Co-Founder and Chief Investment Officer at Invemo.