Digital asset trading firm STS Digital has launched a suite of rules-based investment strategies for professional and institutional clients.

The company, which is regulated by the Bermuda Monetary Authority, said its quantitative investment strategies offering will provide access to systematically executed strategies involving spot assets, options and other derivatives.

Each strategy will follow a methodology established in advance, covering the selection of assets, rebalancing and risk parameters. STS Digital said it would not exercise discretionary investment judgment within the strategies.

Clients will gain access through over-the-counter derivatives instruments developed on the company’s regulated structured-products infrastructure, which spans more than 400 digital assets.

The first strategy to launch, Smart Bitcoin, is designed to give institutional investors exposure to bitcoin while managing the cryptocurrency’s volatility.

Rather than maintaining a fixed bitcoin position, the strategy adjusts exposure according to a predetermined volatility target. It reduces exposure when market volatility increases, and raises it when volatility falls.

The company said volatility targeting had been used for decades in index-linked products and institutional portfolios in traditional financial markets.

Maxime Seiler, chief executive and cofounder of STS Digital, said: “Institutional clients keep asking the same question, how do we hold bitcoin without inheriting the full swing of its volatility?

“Smart Bitcoin answers that with a technique traditional markets have relied on for decades. The strategy targets a defined level of risk and adjusts bitcoin exposure systematically as volatility moves, so allocators get exposure with a risk profile they can plan around.

“That is what we mean by Smart Bitcoin: not a view on the price, but discipline in how to get exposure.”

STS Digital is also developing strategies focused on areas including currency-debasement hedging and options-based income.

The methodologies can incorporate systematic options overlays, including covered calls, as well as volatility strategies and defined-outcome structures.

Jeremy Dominh, head of structured products and QIS at STS Digital, said: “QIS is about turning a market thesis into a repeatable process.

“We establish the methodology, risk parameters and rebalancing rules upfront, then execute systematically. That consistency and transparency is exactly what institutional clients entering digital assets are asking for.”

Clients can access the strategies through STS Digital’s platform using its user interface, application programming interface or voice services.

The offering is being provided under the company’s Class F digital asset business licence, issued by the BMA.

STS Digital is backed by investors including CMT Digital, Kraken parent Payward, Arrington Capital, Strobe Ventures, F-Prime and BitRock Capital.