Superstate Launches Bitcoin and Ethereum Carrier 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 typically more bullish, and the price in the spot market. The problem is that exploiting this corner of finance, known as cash-and-carry or basis trades, requires a lot of time and attention. That’s why Superstate, a cryptocurrency firm specializing in tokenizing conventional financial services, has created its new Crypto Carry Fund that allows wealthy investors to gain exposure to spreads on the spot and futures market in the form of Ethereum ERC-20 tokens.

Superstate was founded by Robert Leshner, a former banker highly respected in the cryptocurrency world for building complexone of the first and most successful DeFi platforms. In an interview with Fortune, Leshner said that some sophisticated investors have been earning a return premium for years on the opportunity to arbitrage cryptocurrency spot and futures prices. But by creating a token to make the trade, he said, Superstate has made the process more accessible and also more liquid because traders will be able to swap the tokens, known as USCCs, with each other.

Superstate raised $14 million late last year and launched its first fund in early 2024, offering tokenized versions of familiar products like Treasury Bills. The new Crypto Carry fund will primarily invest in arbitrage opportunities in both Bitcoin and Ethereum, but during times when spreads aren’t an issue, it will instead put investors’ money in T-bills and other safe havens. Unlike hedge funds, there is no lock-in and returns will be available on a daily basis.

Superstate co-founder Jim Hiltner says the new Superstate fund will charge clients a 75 basis point fee, and added that it’s a better deal for investors than seeking exposure to cryptocurrency carry trades through hedge funds, which charge a so-called twenty-two rate. Hiltner also said the fund is structured so that it is not vulnerable to margin calls and will have a liquidity cushion in any event.

The biggest bummer for most investors is that the new fund is only open to so-called qualified buyers who have $5 million in assets, while the lowest buy-in is $100,000. Superstate’s founders say they hope the assets will become more widely accessible over time, but for now the new fund is revolutionary because it is fully compliant with existing U.S. regulations.

In the bigger picture, SuperState is at the forefront of a growing corner of the cryptocurrency industry that seeks to tokenize conventional assets. While companies, including banks, have dabbled with the idea of ​​“real-world assets” on the blockchain for years, the idea finally seems to be taking a gamble as Wall Street moves toward full-on cryptocurrency. Indeed, traditional finance giants are making a push, including Goldman Sachs Consulting Firmwhich says it will be launched three tokenization projects before the end of the year.

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

“We’re getting exactly the traction we wanted,” Leshner says. “More important than AUM is that intermediaries like prime brokers are plugging into crypto.”

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