How to use market-neutral strategies with Gate Wealth Management to build a yield-enhancing portfolio that withstands bull and bear markets?

The core of market-neutral strategies lies in simultaneously establishing long and short positions to offset the market’s systematic risk. For example, investors can buy a basket of promising tokens’ spot holdings while simultaneously opening equivalent market cap short positions via futures or perpetual contracts, making the entire portfolio’s value independent of market fluctuations. When the market experiences intense volatility, the “shield” role of this strategy becomes particularly evident.

Market Dilemma: Challenges of High Volatility and Opportunities for Institutionalization

The current market is in a typical “hybrid cycle.” According to Gate market data, as of January 29, 2026, Bitcoin (BTC) is priced at $88,840.3 with a market cap of $1.78T, but its price has only changed -0.54% in the past 24 hours.

Market structure is undergoing profound changes. Fidelity Digital Assets’ Vice President of Research pointed out that cryptocurrencies are gaining mainstream recognition. They are no longer seen merely as a form of volatility speculation but as an accepted store of value.

Institutional investors continue to pour in through compliant channels such as spot Bitcoin ETFs. This shift introduces a new market characteristic: the traditional four-year bull-bear cycle logic may be extended or reshaped, leading the market into a “hybrid cycle” with reduced volatility but increased structural opportunities.

Strategy Foundation: What Is a Truly Neutral Strategy?

Market-neutral strategies aim to eliminate directional market risk. They construct portfolios with long and short positions that offset each other, achieving a net zero market exposure.

In Gate’s Neutral Trade product category, market-neutral strategies are explicitly listed as options with relatively low drawdowns and risks, while offering more stable returns. This may sound complex, but the core idea is simple: don’t bet on market rises or falls, only profit from “structure” and “spread.”

Statistical arbitrage involves using algorithms to find temporary price deviations between two or more highly correlated crypto assets (e.g., two Layer 1 tokens). By shorting the outperforming token and buying the underperforming one, traders bet on their prices reverting to historical means.

The basis trade (cash-and-carry arbitrage) is a more classic strategy. When Bitcoin futures prices are significantly higher than spot prices, traders can buy Bitcoin in the Gate spot market and simultaneously sell equivalent futures contracts, locking in this “spread” as an almost risk-free profit.

Revenue Engine: How Do Neutral Strategies Achieve Returns on Gate?

At Gate, neutral strategies are not just theoretical but practical tools accessible to ordinary investors through specific products. The “Market Neutral” vault in Neutral Trade is a typical example. These products are usually operated by professional quantitative teams, utilizing methods like statistical arbitrage and cash-and-carry arbitrage to automatically execute trades. Their advantage is providing investors with an experience close to “absolute returns,” aiming to generate positive returns in any market environment.

Another straightforward example is quantitative arbitrage strategies. Their core is to profit from funding rate differentials between spot and perpetual contracts. Operationally, traders buy mainstream assets like BTC or ETH in the Gate spot market while shorting equivalent perpetual contracts in the derivatives market.

Since perpetual contracts require longs to periodically pay funding rates to shorts, this becomes a stable income source for arbitrage strategies. According to strategy analysis, such strategies can achieve annualized returns of 20%-30% in a bull market and maintain stable returns of 8%-10% even in bear markets, managing risk through strict leverage control and diversification.

Portfolio Enhancement: When Profits Meet Gate Capital Preservation Products

Market-neutral strategies already build a solid profit foundation. But smart investing goes beyond that—how to make the profits “reproduce” is key to boosting overall returns. This introduces the concept of “income enhancement.”

An efficient enhancement plan is to periodically transfer the cash flow profits generated by market-neutral strategies into Gate’s capital preservation or stable investment products for secondary growth. The two main purposes are: first, to convert floating profits into predictable, fixed investment returns, further smoothing asset volatility; second, to improve overall capital efficiency and prevent idle profits.

Gate offers a variety of options. For example, the USDT fixed-term wealth management often launches limited-time promotional activities, providing new users with highly attractive short-term high-yield experiences to familiarize them with the investment process.

For users seeking medium-term stable allocations, Gate’s USDT fixed-term products with clear lock-up periods and reference annualized yields are recommended. For instance, in January 2026, Gate launched a 7-day BTC fixed-term wealth management ACU with additional rewards, offering an extra 10% annualized bonus for subscribing to designated products on top of the base yield.

Cycle Response: A Complete Guide to Dynamic Adjustment

Investing is not static; changing market conditions and personal goals require dynamic adjustments. Whether in a bull, bear, or volatile market, Gate provides tools to help optimize your allocation.

In a bull market, investors can combine market-neutral strategies with directional holdings. For example, maintaining core spot positions in Bitcoin and Ethereum to benefit from trend rallies, while allocating some funds to neutral strategies for stable cash flow.

In bear or volatile markets, focus more on capital preservation and steady returns. Increase the proportion of market-neutral strategies and transfer their profits into Gate’s USDT fixed-term wealth management or private wealth services.

Gate’s private wealth management offers a more systematic solution. By employing multi-asset, multi-strategy allocations, it constructs an absolute return system that traverses bull and bear markets, especially suitable for larger investors aiming to avoid emotional decisions in complex environments.

When Bitcoin hovers around the $90,000 mark, holders of GT might find confidence in its unique ecosystem value. GateToken (GT) derives its value from the growth and practical expansion of the entire Gate ecosystem. It represents investors not just as traders but as active participants in ecosystem development. Markets always sway between greed and fear, but a robust income framework can help you find a relatively steady course amid turbulent waters.