A rising star in Asia closer to MicroStrategy (MSTR), Metalpha Technology Holding Limited (NASDAQ: MATH) provides qualified investors and institutions with cryptocurrency wealth management services. CEO Adrian Wang founded the company with a mission to build a sustainable cryptocurrency ecosystem with effective hedging solutions in an industry known for boom and bust cycles. With the correct application of derivative products, investors can “earn more and lose less” when the market is in turmoil.
“The cryptocurrency industry still has room for growth, despite the challenges it faces this year. We are looking closely at how to build a stronger, healthier global market for digital assets, which we are doing with our partners, like Antalfa, and many others. – Adrian Wang, Founder and CEO
The company changed its name from Dragon Victory International Limited (NASDAQ: LYL) and is backed by Antalpha Technologies Limited, the world's leading blockchain financial services company. In the past year, Metalpha has not only built a stronger trading, research, and compliance team internally, but has also concluded several partnerships such as the Litecoin Foundation, NextGen Digital Venture, GRVT, ParaX, and many more. As a Nasdaq-listed company, Metalpha holds Type 4 (securities advisory) and Type 9 (asset management) licenses through its wholly-owned subsidiary, LSQ Capital Limited, from the Securities and Futures Commission of Hong Kong. (SFC).
The focus on compliance paid off when the Financial Supervision Commission (SFC) granted an increase in the Type 4 licence. Metalpha and LSQ Capital are actively working with the SFC to raise the Type 4 licence. With the enhanced Type 4 licence, in addition to providing securities advisory services, LSQ Capital is now able to issue analyzes and reports on virtual assets to qualified investors.
Advantages in trading
As a leader in cryptocurrency derivatives, Metalpha offers clients customized products, such as Accumulator and Snowball, which are based on mathematical models with precise financial engineering. The trading team has rich experience with Wall Street banks. The company reported $382 million in notional amount of derivative products issued under its wealth management trading arm, which generated fiscal year income of $5.7 million jumping from $0.1 million in fiscal 2022, an increase of 5,600%.
The company's trading positions were always intended to be market neutral. The Company has set strict risk limits on its positions and strictly adheres to regulatory requirements in the region in which it operates.
Bullish on Bitcoin
“The Bitcoin price rally indicates strong demand from global investors as they are encouraged by the recent performance of Bitcoin ETF flows. We believe a halving event later this year could push the Bitcoin price to a new high.” – Adrian Wang, Founder and CEO
Metalpha is proud to be a long-standing advocate of Bitcoin and blockchain technology. The company has been vocal about its belief in the mass adoption of Bitcoin in the future since approving Bitcoin ETFs. The company bills itself as a growth-driven crypto stock and can be compared to MicroStrategy in several ways. Both Metalpha and MicroStrategy focus on investing in Bitcoin, while Metalpha focuses specifically on the wealth management sector. Since the successful restructuring, Metalpha stock has had a strong performance, rising more than 86% year over year as of March 3, 2024, according to Yahoo Finance.
Metalfa vs MicroStrategy
“It has been a pleasure working with the great team at NextGen. Launching the NextGen Fund was the first step from both sides to launch compatible and rewarding products together. We look forward to building an even stronger partnership going forward.” Adrian Wang, Founder and Chairman of the Executive Board
While Metalpha shares many similarities with MicroStrategy, the main differences remain in the business model, service locations, and products. Metalpha's revenues are largely focused on growth in a bull market as Bitcoin prices rise, resulting in balance sheet expansion and increased trading revenues. In a bull market, a more active user base generally results in a higher subscription rate. Therefore, the company's revenue and volume are experiencing high growth in a rising market.
While MicroStrategy is headquartered in the United States, Metalpha is headquartered in Hong Kong. The recent Web3 policies promoted by Hong Kong regulators have proven effective and forward-looking. It is reasonable to expect that the digital asset industry will also boom in 2024 as Hong Kong fully embraces Bitcoin ETFs, STO/RWA, and other notable innovations.
At the product level, Metalpha offers customized hedging solutions and derivative products to qualified investors and institutions. Compared to MicroStrategy, Metalpha's business model is expanded, covering not only Bitcoin and Ethereum, but also other mainstream cryptocurrencies on demand. The company offers a fully customized investment and trading experience to its clients.
The company aims to offer a wide range of enterprise-focused products as well. Metalpha has launched Next Generation Fund I, in partnership with NextGen Digital Venture Limited. According to Bloomberg, the $100 million target fund invests directly in Grayscale investment products and indirectly through structured derivatives in connection with Grayscale investment products, giving institutions, family offices and high-net-worth individuals a compliant channel to gain indirect exposure to cryptocurrencies.
Despite all the differences, Metalpha sees itself as the exact strategy for Asia in the spirit of the cryptocurrency revolution and the mass adoption of Bitcoin.
This is a guest post by Yiwei Wang. The opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
