South Africa : Sustained market-beating returns point to crypto asset arbitrage as an alternative investment strategy
- 15 April 2022 / News / 376 / Fares RAHAHLIA
FinTech company Future Forex is using an arbitrage investment strategy to achieve one of the best investor returns relative to risk on the South African market for their clients.
Future Forex, an authorised Financial Services Provider (51884) for currency remittance, estimates that each client can make up to R150,000 annually via their automated and low-risk investment.
At the time of writing, Future Forex has processed more than R2.4 billion in trades, has generated an average annualised return of over 90% for its clients since inception, and has a track record of 100% client profitability.
Future Forex allows clients to maximise their returns with minimal risk through a process called crypto asset arbitrage.
Crypto assets, such as Bitcoin, typically trade at a 2% to 4% premium in South Africa.
This means that R100,000 worth of Bitcoin overseas will cost you approximately R103,000 to buy on South African exchanges.
Future Forex capitalises on this market inefficiency by sending money abroad for its clients, buying the Bitcoin abroad for R100,000 and then selling the same Bitcoin in South Africa for R103,000, allowing their clients to profit off the price difference.
Relative to other investment options available to South African individuals, such as an 8% interest savings account, investing on the JSE or S&P 500, or even buying volatile Bitcoin, Future Forex’s crypto arbitrage provides steady market-beating returns.
The below graph shows their clients’ crypto arbitrage returns since the start of last year, compared with other investment options.
With an initial investment of R200,000 on 1 January 2021, Future Forex outperforms these options, steadily growing in a little over a year to R502,398.
The same investment in the JSE would have ended up flat for the same period, while a direct investment in Bitcoin, which grew 58% since the start of 2021, or the S&P 500, which would have grown the starting capital to R239,162, falls far short of the profit achieved by Future Forex.
Another thing to note from the graph is the steady increase of the Future Forex investment over time, compared to the volatility of other investments.
Harry Scherzer, a qualified actuary and CEO of Future Forex, says that Future Forex has developed a fully hedged trading system that ensures clients are not exposed to any foreign exchange or crypto asset fluctuations when performing crypto asset arbitrage.
“A focal point for our team has been ensuring that the risk is minimised wherever possible.”
“Our fully hedged system ensures that there are no market risks to investors as the profits are known at the outset of any trade”, says Scherzer.
This ensures that service is price agnostic, meaning that you will still make money regardless of whether Bitcoin doubles or halves in price while trading.
Can one expect this gap in price to be around for some time?
It’s unlikely that the crypto arbitrage market will disappear anytime soon, says Scherzer.
“It’s a market that’s been around for more than a decade, and while the profit potential in crypto arbitrage has reduced over the years as more people participate in it, the profit potential has been a rather consistent 1-2% per trade over the last year. I see it being around for many years to come.”
How much profit can one expect to make with this type of investment?
Scherzer explains that the profit from crypto asset arbitrage is dependent on the amount invested per year, and the amount of annual foreign exchange allowance one uses.
South Africans are permitted by law to send up to R11 million abroad per calendar year.
This comprises a R1 million Single Discretionary Allowance and a R10 million Foreign Investment Allowance.
When investing in crypto asset arbitrage, a portion of your foreign exchange allowance is used each time your funds are sent abroad to purchase crypto assets.
The end result is a profit of approximately R150,000 per individual, and R300,000 per married couple per year.
If administration is not your strong point, not to worry.
Future Forex’s in-house tax team and partner tax practitioner do all the applications and foreign investment allowance tracking for you at no cost.
Their focus is on making the process as simple as possible, and they have developed systems to help their clients easily set up both Future Forex and Mercantile Bank (a division of Capitec) accounts.
Future Forex only earns fees when its clients make a profit. Scherzer explains, “We don’t believe in management fees. Rather, we take a percentage of profits earned during the arbitrage process.”
“This ensures that our clients’ interests are aligned with our own and we all profit together.”
Clients receive detailed statements highlighting their return and the costs involved at the completion of each trading cycle, and their investment funds can be accessed at any time upon request.
“We require a R100,000 minimum investment amount because of the fixed costs, mainly bank charges associated with sending funds abroad, that make smaller investment amounts less feasible,” says Scherzer.
Future Forex has experienced extremely rapid growth owing to the service they provide clients in generating exceptional low-risk returns.
With a dedicated team of 23 professionals, Future Forex is poised to provide market-beating returns for more South African clients.
If you would like to invest in this exceptional opportunity, you can visit https://futureforex.co.za to get started.
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