Summary
- US Nasdaq-listed Nakamoto said it is deploying a derivatives strategy using its Bitcoin holdings to generate additional income and hedge downside price risk.
- Nakamoto said part of the Bitcoin held in Kraken Custody will be used as collateral, while Bitwise Asset Management will run covered-call and protective-put option strategies through a separately managed account.
- The company said proceeds from the program will be used for additional Bitcoin purchases and general corporate operations, while ownership of the pledged Bitcoin will remain unchanged and detailed results will be disclosed in its first-quarter earnings report this year.
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Nakamoto, a Nasdaq-listed US company, said on April 24 it is using its Bitcoin holdings in a derivatives strategy aimed at generating additional income and hedging downside price risk.
The company disclosed details of its Bitcoin derivatives program, which has been operating since the first quarter of this year. A portion of the Bitcoin held in Kraken Custody is being used as collateral, and Bitwise Asset Management manages the strategy through a separately managed account, or SMA.
The program centers on covered-call and protective-put strategies. It sells call options to generate additional income while buying put options to limit losses from a sharp drop in Bitcoin prices.
Tyler Evans, Nakamoto's chief investment officer, said Bitcoin's implied volatility is one of the most persistently mispriced areas in capital markets. Proceeds generated through the program will be used for additional Bitcoin purchases and general corporate operations.
The Bitcoin posted as collateral remains owned by the company and continues to be counted in its official Bitcoin holdings. Detailed performance results from the program are set to be disclosed in the company's first-quarter earnings report this year.
Doohyun Hwang
cow5361@bloomingbit.ioKEEP CALM AND HODL🍀
