Robert Leshner’s Superstate, an avant-garde crypto-centric asset manager, has introduced its second innovative product—a market-neutral strategy designed to generate returns irrespective of market fluctuations.

Why This Matters: Superstate Crypto Carry Fund (USCC)

The Superstate Crypto Carry Fund (USCC) aspires to surpass the yield of short-term U.S. treasuries, presenting a compelling alternative for investors seeking superior returns.

The Broader Perspective

Leshner, in an interview with Axios, emphasized the burgeoning demand for strategies offering yields higher than those of traditional treasuries. This is evidenced by the rise of Ethena, an algorithmic stablecoin with an integrated carry trade mechanism, which has achieved a market cap exceeding $3 billion.

“We’re entering uncharted territory,” Leshner remarked about the potential market for his fund, underscoring the proven efficacy of the cash-and-carry strategy within the crypto realm. This approach stands as one of the most comprehensible and tested investment models in the industry.

Earlier this year, Superstate launched a money market fund, marking its initial foray into the market.

Read more: Surge in Crypto Fund Inflows: July Records $3.2 Billion Amid Investor Optimism

Mechanics of the Cash-and-Carry Trade

In traditional finance, a cash-and-carry trade involves purchasing a security or commodity and concurrently selling a futures contract on the same asset at a higher price, profiting from the price differential post-delivery.

USCC employs this strategy with bitcoin and ether, aiming to capitalize on market inefficiencies. Leshner notes that current market conditions enable locking in an annualized yield of 12%, derived from bitcoin and its futures prices.

Operational Insights

The fund possesses the discretion to choose which futures contracts to sell, with the flexibility to shift between digital assets based on the most favorable arbitrage opportunities. This dynamic approach ensures adaptability and maximization of returns in a volatile market environment.

In summary, Superstate’s USCC fund exemplifies a sophisticated and adaptive investment strategy, poised to offer significant yields while navigating the complexities of the crypto market.