Cryptocurrency funds are a new breed of Investment Funds that have emerged in the last few years to capitalize on the opportunity that digital currencies and tokens provide to financial investors.
Since the first Bitcoin fund was launched in 2013, over 700 cryptocurrency funds have been launched, according to Crypto Fund Research, with over 100 new funds joining the fray in 2018 alone. Needles to say, this new market segment of the Fund Management industry is growing phenomenally, with billions of dollars in digital assets under management.
What Is A Hedge Fund
“A hedge fund is an investment fund that pools capital from individual investors or institutional investors and invests in a variety of assets, often with complex portfolio-construction and risk management techniques.”
Hedge funds are simply platforms where investors pool their money to be invested as a unit by a Hedge Fund Manager. While the working mechanism of hedge funds is similar to Mutual Funds and Unit Trusts. Hedge Funds tend to be more aggressive and invest in volatile markets with the aim of generating higher profits for their investors.
What is a Crypto Hedge Fund?
Cryptocurrency Hedge Funds pools money or cryptocurrencies from investors and invests in the trading of digital assets on their behalf. Therefore, the cryptocurrencies in which a hedge fund invests in is at the discretion of the fund manager. It can be Bitcoin (BTC), Litecoin (LTC), Ethereum (ETH), Waves (WAVES) or any other altcoins (alternative coins).
Usually the Fund Manager opts for the assets they perceive to have the highest potential return. At times these may be highly volatile assets which are very lucrative for skilled traders as they surf the market maximizing on the Bid-Ask Spread.
Investing through Cryptocurrency Hedge Funds is made for traders who either do not have the time or the know-how to profitably trade in digital currencies.
Some of the Top Crypto Hedge Funds Globally
Below are a list of the 5 of the top performing Crypto Hedge Funds globally:
Pantera Capital
Pantera Capital is backed by leading corporate institutions such as Rabbit Capital, Fortress Investment Group and Benchmark Capital. The hedge fund invests in several digital assets including Bitcoin (BTC), Ox, BitPesa, Mise and BitOasis.
Founded five years ago by Dan Morehead, the company is renowned for its remarkable performances, having generated over 25,000% worth of profits since its inception. Pantera oversees over $700 million in investor funds across various crypto assets.
BitSpread
BitSpread is a Crypto Hedge Fund that invests in Bitcoin (BTC), Litecoin (LTC), Bitcoin Cash (BCH) and Ripple (XRP) assets. It's primary source of money is market-making activities and currently holds over $100 million in client funds.
Over a period of 24 hours, BitSpread averages 5,000 transactions, amounting to monthly trading volume of about $1 billion. BitSpread was established in 2014 by Cedric Jeanson.
Silver 8 Capital
In addition to managing cryptocurrency investments for its clients, this compnay also invests in promising blockchain and cryptocurrency start-ups. Founded by Jose Suarez and Manual Anguita, Silver 8 manages over $300 million in client funds.
Grayscale
Having been in existence for five years, the Grayscale Crypto Hedge Fund currently has an asset base worth $1,6 billion. This makes it one of the most valuable hedge funds in the cryptocurrency space.
It's founder, Barry Silbert, is an ardent believer the future of virtual currencies. For this reason, the fund invests in an array of digital assets, including Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Litecoin (LTC), and Ripple (XRP).
Coin Capital
Coin Capital is a Crypto Hedge Fund that mainly deals with Cryptocurrency Investments and Blockchain Start-Ups. The objective of this company is to promote the adoption of decentralized approach in the investments sector.
The firm was founded by Jeff Nabbers and has a client base that consists of Blockchain Start-ups, Individual Investors and Institutional investors.
Bit Bull Fund
Bit Bull is a crypto hedge fund that is based in San Francisco, Califrnia. It as established in 2016 by Joe DiPasquale.
Notably, BitBull is open to all types of investors and does not charge any fees. However, the minimum investment amount is US$100,000. The firm offers venture capital funding to promising cryptocurrency projects,
Brian Kelly Capital Management (BKCM)
Founded by Brian Kelly, BKCM is still new to the market managing assets worth $50 million. It offers three-tiered investment approach for its clients, with:
Initial Coin Offerings taking 20%;
Buy and Hold taking 50%
The remainder being managed by BKCM.
BKCM invests in popular cryptocurrencies such as Bitcoin (BTC), Litcoin (LTC), Ethereum (ETH) AND Ripple (XRP), as well as lesser known altcoins such as Augur and Siacoin.
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