The rapid development of the digital economy has thrust digital assets, such as Bitcoin and Ethereum, into the investment spotlight. However, navigating the volatile crypto market and the myriad of investment options can be daunting. How can investors pursue profits while effectively managing risks for a stable return on investment?

ChainUp Investment's Smart Beta strategy offers investors enhanced, balanced, and sustainable digital asset investment returns.

Let's delve into the underlying logic of digital assets.

The rise of digital assets and blockchain technology has brought unprecedented change to the global economy. Blockchain's decentralized nature has broken down traditional financial barriers, ensuring the secure and trustworthy transfer of value and information. This decentralization not only enhances data privacy and security but also reshapes business models, propelling the development of Web 3.0 and building a more transparent, secure, and personalized digital world for users.

Compared to traditional financial assets, digital assets exhibit higher risk-return ratios and potential for earnings. For instance, Bitcoin's performance in recent years has far exceeded that of traditional assets like crude oil, stock indices, and gold. However, the volatility and uncertainty of the crypto market also pose challenges for investors in effectively managing risk while chasing returns.

 This is where ChainUp Investment's Smart Beta strategy comes into play.

ChainUp Investment Smart Beta Strategy: Capturing Long-Term Returns

The Smart Beta strategy aims to capture long-term gains across the broad digital asset market through macroeconomic analysis, fundamental analysis (such as tokenomics valuation and revenue estimation), and technical analysis (including derivatives data analysis). It provides investors with the best digital asset market asset allocation tool.

The core advantages of the Smart Beta strategy include strategic rebalancing based on market conditions and macroeconomic analysis, fundamental and technical screening of cryptocurrencies, and strict risk management.

Smart Beta Investment Research Framework

Macroeconomics 

We take a deep dive into key economic indicators to identify market trends and potential investment opportunities. Here's what we focus on:

• - Economic and Earnings Growth: By analyzing factors like Gross Domestic Product (GDP) growth, we assess economic cycles and overall market sentiment. We also forecast economic and company earnings to estimate potential market returns.

• - Liquidity: We evaluate how government monetary and fiscal policies impact liquidity (available cash) in the market, predicting future trends.

• - Risk Appetite: We gauge investor risk tolerance by analyzing indicators like trading activity and risk preferences. This helps us understand how comfortable investors are with taking on risk.

In simpler terms, we analyze the broad economic landscape and investor behavior to uncover promising investment opportunities.

Fundamental Research 

We delve into the fundamentals of digital assets to assess their long-term value, focusing on:

• - Industry Cycles: Analyzing supply and demand dynamics to determine industry trends.

• - Technological Upgrades: Evaluating the impact of upgrades on project performance in terms of functionality, security, privacy, etc.

• - Dapps and Ecosystems: Assessing the activity of Dapps, developer contributions, and user engagement to analyze ecosystem vitality.

• - On-chain Data Analysis: Analyzing smart money flows, whale activities, etc., to gauge market sentiment.

• - Mining Power/Difficulty: Assessing mining costs and analyzing valuation fundamentals.

• - Tokenomics analysis: involving examining token allocations, release schedules, and token utilities to understand the economic and functional framework of token

Technical Analysis 

We utilize technical analysis tools to aid in market trend identification and trading opportunities.

• - Large Cycle Judgments: Identifying bull and bear cycles.

• - Key Support and Resistance: Analyzing previous highs/lows.

• - Moving Averages: Evaluating the cost basis of long-term holders.

• - Trend/Volatility/Liquidity Indicator Tracking: Monitoring indicators such as funding rates and open interest to assess market sentiment and liquidity.

Implementation of Smart Beta Strategy

Bitcoin & Ethereum: Timing Adjustments 

For Bitcoin and Ethereum, as leading cryptocurrencies in the market, their price movements are influenced by a myriad of factors, and relying solely on a buy-and-hold strategy may limit profit potential. To enhance investment efficiency and reduce risk, investors can adopt timing strategies, buying or selling at opportune moments to achieve higher returns.

For investing in Bitcoin and Ethereum, the Smart Beta strategic timing and portfolio adjustment approach features the following characteristics:

• 1. Multi-Dimensional Data Analysis

• - Closely monitors global economic conditions, monetary policies, and regulatory environments to predict market trends and adjust investment strategies timely.

• - Assesses how policies impact market sentiment and price movements, determining how market sentiment influences price volatility to adopt corresponding investment strategies.

• 2. Portfolio Optimization

• - Uses technical analysis indicators, such as moving averages and pattern indicators, to identify price trends and support/resistance levels, finding optimal buying and selling times.

• - Integrates market data and fundamental information analysis to assist the investment team in making scientific decisions and optimizing the portfolio.

Alpha Tokens Selection 

In the later stages of a bull market, potential altcoins often outperform the broader market, demonstrating greater upside potential. While Bitcoin and Ethereum are foundational to the digital asset market, their growth rates and returns have become more stable. Altcoins represent the innovative direction of the crypto realm, harboring significant growth potential and a 'breakthrough' appeal.

ChainUp Investment’s Smart Beta strategy includes an Alpha token selection strategy aimed at actively researching and selecting investment targets to uncover opportunities with high potential for excess returns. This strategy for investing in small-cap coins includes:

1. Potential Value:

• - Altcoins typically exhibit higher volatility and risk but also harbor significant potential for returns. The Alpha selection strategy involves analyzing the price action relative to the coins valuation based on the protocol metrics, to determine if the valuation of certain tokens are overvalued or undervalued. 

• - The Alpha selection strategy, through in-depth research and precise filtering, can identify high-quality altcoins with unique value and sustainable growth potential to achieve above average market return.

2. Scarcity Capture:

• - Compared to mainstream coins, altcoins have lower visibility and liquidity, making their price more susceptible to market sentiment and news, which can provide potential opportunities for high returns to investors.

• - Alpha focuses on emerging investment tracks, exploring undervalued altcoin investment opportunities, conducting thorough fundamental analysis to assess their economic models, project values, etc., identifying high-quality altcoins with unique competitive advantages and long-term growth potential, securing an early mover advantage. Through professional investment strategies, it aims to help investors buy high-quality altcoins in different tracks at various times, such as DeFi, NFT, GameFi, etc., striving to create returns that exceed the market average for investors.

3. Risk Management:

• - Although altcoins have high return potential, they also come with higher risks.

• - The Alpha selection strategy effectively controls the overall risk level of the investment portfolio through high-frequency rebalancing and timely avoidance of short-term market volatility risks.

4. Curbing Emotional Trading:

• - Market volatility of altcoins may cause FOMO (fear of missing out) among investors, leading to irrational investments.

• - The Alpha selection strategy helps investors overcome FOMO by actively researching and selecting investment targets, avoiding irrational investment behaviors such as chasing highs and selling lows.

Risk Management: The Ballast of Investment 

To protect investors' interests, we always prioritize risk management, constructing a comprehensive risk management system to safeguard every investment with a robust force.

Prudent Selection of Counterparties, Building a Secure Foundation

• - Adhere to regulatory requirements, employing regulated fund structures to ensure the safety of investor funds.

• - Choose more credible custodians and regulated exchanges, rigorously reviewing the qualifications and reputation of counterparties.

• - Employ independent fund administrators and auditors to ensure more transparent fund operations.

Diverse Strategies to Effectively Tackle Market Risks

• - Stick to prudent investment philosophy, trading only spot assets to avoid the amplified risks of leveraged trading.

• - Implement appropriate liquidity management strategies, adjusting asset allocation in time to meet investor redemption needs.

• - Use scientific position control measures to strictly control the position ratio of individual assets and overall assets, reducing risks brought by market fluctuations.

Professional Execution to Prevent Operational Risks

• - Strictly comply with regulatory requirements, establish comprehensive internal control mechanisms, standardize operational processes, and ensure the compliance of investment activities.

• - Employ professional trading strategies to reduce the risk of operational errors.

Why Now?

Crypto has developed from a geek-centric tech innovation to one of the most exciting and non-negligible asset classes.

• - Maturity of market: crypto market has evolved, embracing sustainable protocol structures, refined tokenomics, and rational market participants, moving away from "get rich quick" schemes towards more innovative protocols.

• - Sub-sector development is more clear: the growth of blockchain and Web 3.0 infrastructure and applications, including Layer 1 and Layer 2 solutions, DeFi, GameFi, and DePin, has withstood the latest bear market, demonstrating their diversity, vitality, and potential for expansion.

• - More institution adoption: after the crypto winter, institutional engagement has rebounded. The introduction of regulated crypto products like ETFs is poised to attract significant investment into the crypto sector. Furthermore, compliant exchanges and supportive accounting standards are set to enhance institutional confidence in crypto investments.

As a platform focused on digital asset management, ChainUp Investment is committed to providing investors with innovative and sustainable investment solutions. Whether you are a novice investor or an experienced institutional investor, ChainUp Investment's Smart Beta strategy offers an ideal investment choice.

The management and investment of digital assets will continue to be a focal point for investors. And ChainUp Investment's Smart Beta strategy will safeguard your journey, ensuring stable profits in digital asset investment!

The future of digital asset management is promising!