High Volatility Assets (HVA's)

Previously, we covered the motivation for low volatility assets. Here, we’ll cover the motivation for high volatility assets and discuss their interdependencies.

Broadly, the more capital you have under management the more likely you are to value stable risk-adjusted returns. 20% ARR with minimal drawdowns every few years is incredibly compelling if you’re managing $10B of capital (because $2B a year goes a long way); but what if you’re managing less or looking to move faster?

Where low volatility assets are designed for wealth accumulators, high volatility assets are for traders who want to take on more risk in exchange for faster potential returns; volatility is their opportunity.

Traders seek assets with larger swings to capture directional moves, express high-conviction views, or hedge other exposures. A higher volatility BTC (JrBTC) allows holders to amplify directional bets using a familiar token model without the operational hassle of leverage. This market for convenient leverage is currently served by leveraged ETFs in equities markets and perpetual futures in the crypto markets; the latter of which doubled to $58.5T in trading volume in 2024.

Who benefits?

A wide range of participants:

  • Momentum and trend-following funds: who prefer assets with strong directional follow-through.
  • Volatility traders: who want to isolate convexity.
  • Systematic funds: seeking non-linear return profiles.
  • Structured product issuers: designing high-return instruments with defined downside.

In short, anyone who prefers trading signal-rich, high-beta assets.

What makes this asset interesting?
  • It can carry a funding rate: When the market is seeking stability, biasing SrBTC, relative demand for the higher volatility side falls, introducing a yield for holding it (or a funding premium for shorting it). Conversely, when the market is seeking leverage, biasing JrBTC, relative demand for the lower volatility side falls, introducing a yield for holding it.
  • It can be embedded in derivatives: A higher volatility BTC tranche opens the door to a new class of instruments from leverage trackers to option replication, structured vaults, or even reflexive strategies like rebalancing protocols that amplify risk in uptrends.
  • It aligns with market structure: Much of crypto trading is driven by narratives and momentum. This asset allows funds to express views more efficiently without liquidation or margin risk.

To learn more about the system, read the documentation:












brought to you by Ampleforth