Deutsche Digital Assets (DDA), a German digital asset manager, has joined forces with Swiss index provider Compass Financial Technologies to introduce a Bitcoin investment strategy by launching the DDA Bitcoin Macro Allocation Index.
Serving as “the world’s first index leveraging macroeconomic indicators to regulate Bitcoin exposure”, this index dynamically adjusts its allocation between Bitcoin and USD based on key macroeconomic factors.
In October 2022, DDA published research revealing that four major economic factors explain 83% of Bitcoin’s long-term price movements, establishing Bitcoin as a macroeconomic asset. Building on this research, the DDAMACRO Index offers investors comprehensive exposure to Bitcoin, aligning with prevailing macroeconomic conditions. When these factors diverge, the divested portion is strategically allocated to USD.
Marc des Ligneris, in charge of quantitative strategies at Deutsche Digital Assets, said: “This strategy exploits the fact that, until now, every crypto winter has been at least partially explained by major macroeconomic factors. As long as this is the case, the strategy should perform well.”
Guillaume le Fur, CEO of Compass Financial Technologies, added: “This new index integrates relevant macroeconomic factors for investors to manage their exposure to Bitcoin amidst diverse market conditions.”
The asset manager said this strategic initiative marks the inception of an upcoming series of smart beta strategies designed to diversify from conventional passive approaches and provide these alternatives to investors through traditional structures, such as an ETP.
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