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Overview
Diamond Hands (DH) is a rule based option selling program designed for investors with BTC holdings looking to generate yield on top of their existing holdings. The fund is denominated in BTC.
Our strategy is centered around writing put options to generate income, while also creating opportunities to acquire Bitcoin at lower prices. We prioritize coin preservation, aiming to protect your BTC holdings even in volatile markets.
Coin preservation and meticulous risk management are at the core of our approach, allowing us to navigate market fluctuations while aiming for attractive yield.
Investment highlights
Diamond Hands (DH) is an actively managed options investment strategy designed for investors with BTC holdings looking to generate yield on top of their existing holdings. The fund is denominated in BTC. This strategy is available to institutional and qualified investors only.
Enhanced yield generation
Diamond Hands is committed to executing a robust Bitcoin yield enhancement strategy through an options trading program, with a focus on the preservation of the Bitcoin (BTC) principal.
Aimed at coin preservation
Aimed at the preservation of BTC principal, the Fund effectively seizes market pullbacks and optimizes entry points through its synthetic acquisition strategy.
Institutional grade infrastructure
Diamond Hands is an investment fund registered with the Bermuda Monetary Authority (BMA) and managed by XBTO International Ltd.* Diamond Hands leverages the resources of the entire XBTO Group, including technology, quantitative research, finance, legal and compliance.
Robust risk management
Drawing on more than 9 years of mastery in digital asset trading and risk management, we leverage our strong foundation in traditional finance to expertly navigate the ever-evolving crypto landscape.
* XBTO International Ltd is a licensed digital asset business regulated by the Bermuda Monetary Authority (BMA) and is being registered as a Class B person under the Investment Business Act 2003 (as amended) (IBA).
Strategy outcomes across market conditions
- UP trending market
Fully benefit while preserving initial Bitcoin position
- Range-bound market
Option premium and Bitcoin accumulation
- Bear market
Capital preservation and Bitcoin accumulation
Investment process - highlights
- 1. Sell Put Options
The Fund systematically sells put options for a portion of its NAV until the options are exercised, triggered by a Bitcoin price pullback. Essentially, the Fund is compensated to “buy the dip”.
- 2. Buy Perps
- 3. Sell Call Options
- 4. Exit Perps
Net returns (BTC)
Diamond Hands is a bitcoin accumulation strategy that aims to preserve initial Bitcoin capital and generate yield in Bitcoin. 2019 to 2023 returns are backtested returns.
1.97
Information ratio*
50.51
Total BTC accumulated for 100 BTC of initial capital (net of fees)*
-3.86%
Max drawdown*
*Indicative average based on composite backtest and live performance.
BTC accumulation (max notional exposure of 65% of AUM)
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Diamond Hands NAV (in BTC)
The Fund sells 20 delta Puts and aims at covering the ‘excess delta' accumulated (when puts are exercised) by selling 35 delta Calls.**
Average call premium
2.26%
Average put premium
1.65%
Hypothetical simulated performance results have certain inherent limitations. There is no guarantee that the market conditions during the past period will be present in the future. **Numbers are a composite of live and backtest performance.
Net returns (USD)
Diamond Hands, denominated in Bitcoin, seeks to deliver excess returns above Bitcoin’s price performance. The performance of the fund can be thought of as ‘yield’ generated from the option selling program.
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Diamond Hands backtested NAV (in USD)
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Hypothetical simulated performance results have certain inherent limitations. There is no guarantee that the market conditions during the past period will be present in the future.
Resilient under extreme market conditions
Diamond Hands exhibits long term resilience and stability across market cycles, consistently minimizing drawdowns in period of market stress.
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Hypothetical simulated performance results have certain inherent limitations. There is no guarantee that the market conditions during the past period will be present in the future.
- 1. Covid crash
- 2. China ban
- 3. CPI Top
- 4. LUNA /3AC crisis
- 5. FTX collapse
- 6. SVB bank collapse
Risk management
Diamond Hands implements a robust multi-layer risk management framework.
Proprietary risk systems
The Fund deploys its own proprietary risk systems for real-time monitoring of key risk metrics.
Proprietary risk dashboard: PNL, exposure, greek sensitivities, volatility surface generation, VaR, drawdowns, volume, funding rates, volume, slippage, collateral breakdowns, commissions and margin usage.
Automated alerts: Performance, exposure changes, new trades, VaR levels.
PM monitoring qualitative and quantitate predefined rules/limits
Adhere to well defined portfolio management guidelines and exposure limits:
Stop Losses: All “accumulated delta” exposure actively risk managed with 5 to 10% stop losses.
Strategy limits: well-defined Value at Risk (VaR) limits to control potential losses at a specific confidence level, position limits to manage exposure effectively.
Governance framework - XBTO Risk Committee
Provides independent management and oversight of the investment management activities.
Defining governance, control and supervision framework:
Portfolio reviews: periodic reviews of allocations, risks, research priorities etc.
Formal policies: collateral management and risk limits approved by board of directors.
Regulation: XBTO International Ltd is a licensed digital asset business regulated by the BMA.
XBTO overview
- From 2015 through 2022, XBTO operated exclusively as a proprietary crypto trading and investment firm.
- Over the years we became a leading infrastructure participant contributing over 2% of global crypto derivatives volume and investing in some of today’s major players.
- In late 2022, the failings of the industry convinced us to transition into a digital assets investment platform to help institutional players ‘safely’ access digital assets.
- In 2023, we have completed the acquisition of Stablehouse to round out the core infrastructure and capabilities required to serve the needs of institutional clients and HNW individuals.
- We are licensed by the Bermuda Monetary Authority and have a presence in 5 locations: Bermuda, Miami, New York, London, Paris and Abu Dhabi next.
Our key partners
Leadership
XBTO is led by financial industry veterans with an extensive background across firms such as SAC Capital, Goldman Sachs, and State Street.
- Phil Bekhazi
CEO, Founder
Prior experience:
SAC Capital Advisors, Citibank, Calypso Technology
>10 years in digital assets, >20 years in financial services - Javier Rodriguez
CCO
Prior experience:
Goldman Sachs, Barclays Global
>25 years in Investment management - Michael Chauliac
COO
Prior experience:
Goldman Sachs, Barclays Global
>25 years in Investment management - Richad Idris
Co-Founder, CTO
Prior experience:
Société Générale, Exane, Natixis
>10 years in digital assets, >20 years in financial services - Mark Brazier
CFO
Prior experience:
PricewaterhouseCoopers, GFI Group, LiquidX
>20 years in financial services - Nicolas Genechesi
Head, Portfolio Management
Prior experience:
Forum Asset Management, Bainbridge Partners, Timber Hill, Prince St Capital
>7 years in digital assets, >20 years in financial services - Walton Comer
Senior Advisor
Prior experience:
Falcon Bridge Partners, SAC Capital Advisors, Thornhill partners, Lucid
>10 years in digital assets, >20 years in financial services - Mimo Ousseimi
Senior Advisor
Prior experience:
Bank of America (Merrill Lynch), Goldman Sachs, State Street Research and Management Company
>30 years in financial services
Key terms
Name of fund
XBTO Crypto Opportunities Fund SAC Ltd.
Cell name
XCOF Diamond Hands BTC
Investment currency
BTC*
Minimum investment
USD $100,000 equivalent in BTC
Subscriptions
Monthly
Liquidity
Monthly, 45-day notice
Management fee
1%
Performance fee
10%
Investment manager
XBTO International Ltd
Eligible investors
Accredited investors
Fund registration
Bermuda Monetary Authority Professional Class B
Auditor
RSM Cayman
Fund administrator
NAV Consulting
ISIN
BMG316631008
* or USD $100,000 equivalent in BTC
Achievements
XCOF Diamond Hands has been founded on a framework of robust risk management and strong governance.
- 2015XBTO was founded and became the first institutional market maker on several major exchanges.
- 2016XBTO opens Paris office.
- 2017XBTO expands into OTC trading, mining and venture capital.
- 2018XBTO expands into Bermuda.
XBTO joins Blockstream Liquid as a founding node. - 2019XBTO participates in the first block trade of US-regulated bitcoin futures.
XBTO obtains Bermuda digital assets license. - 2020XBTO participates in first micro bitcoin futures trade on CME.
XBTO expands into Miami.
XBTO makes a strategic investment in the seed round for Stablehouse, alongside Dragonfly Capital, Liberty City Ventures and Coinbase Ventures. - 2021Stablehouse secures partnership with the world’s 5th largest fund administrator, Apex for custody & trading white-label platform.
XBTO becomes the main corporate and jersey sponsor for Inter Miami's Major League soccer team co-owned by David Beckham and Jorge Mas. - 2022XBTO’s streaming markets volume grows by 2x.
Proprietary quantitative strategies returned 12.3% in 2022 through the bear market. - 2023XBTO acquires institutional custody and trading platform Stablehouse.
Daily volume hit $300,000,000 per day across company verticals.
XBTO appoints former Goldman MD Javier Rodriguez as Chief Commercial Officer.
Disclaimer
This Presentation (the “Presentation”) is intended solely for the use of prospective investors in determining whether or not to pursue any opportunities with XBTO Crypto Opportunities Fund SAC Ltd., XBTO Global Ltd, XBTO International Ltd. Stablehouse Ltd or any of its group or related companies (together, the “Company”).
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