Ultimate Resource On Crypto And Traditional Hedge Fund Closures (#GotBitcoin?)

Backed by Jamie Dinan and Dan Loeb, Cerrano Capital was launched less than a year ago. Ultimate Resource On Crypto And Traditional Hedge Fund Closures (#GotBitcoin?)

A hedge fund backed by some of the industry’s biggest names, Cerrano Capital LLC, is closing less than a year after it got off the ground, the latest sign of the difficulties new funds are having raising money.

Michael Weinberger’s $230 million hedge fund was launched last year, hoping to raise as much as $1 billion. The fund’s early investors included York Capital Management founder James Dinan and chief investment officer Daniel Schwartz. Billionaire hedge-fund investor Dan Loeb of Third Point LLC was among the investors in Cerrano, according to people close to the matter.

Mr. Weinberger previously oversaw billions of capital as head of equities at York. Cerrano focuses on making both bullish and bearish bets on stocks.

Cerrano lost 1.4% through June of this year, after being up over 5% last year. In the 11 months the firm existed, the fund was up slightly. Mr. Weinberger became frustrated with the time he needed to devote to market the fund, the people say, and decided to return capital and manage his own money.

The decision underscores the difficulties many hedge funds are having making money and raising capital, as investors rethink the value of such funds.

These hedge funds are managed by a team of expert investors who research markets and carry out in-depth analyses with the aim of determining where to direct their investments — obviously where there is more potential for earning more profits. At the end of the day, the investors will receive profits from the market strategies employed and implemented by the fund managers.

Hedge funds have generally performed worse than broader stock market indexes for much of the past several years, making it hard for them to justify high fees. More recently, a widely followed hedge-fund index maintained by data research company HFR declined by 0.46% in June, pulling down the industry’s gains for the first half of 2018. The index rose 0.81% in the first two quarters, which is lower than the 2.65% return on the S&P 500, including dividends, over the same period.

Updated: 3-1-2021

Dan Loeb Is The Latest Billionaire To Dive Into The World Of Crypto

The hedge-fund manager referenced Steve Jobs as he called for openly engaging with the subject while maintaining healthy skepticism.

Another week, another billionaire weighing in on cryptocurrency.

On Monday it was hedge-fund billionaire Dan Loeb, who took to Twitter to share his thoughts on the subject. “I’ve been doing a deep dive into crypto lately,” he said. “It is a real test of being intellectually open to new and controversial ideas.”

Cryptocurrencies aren’t exactly new, but digital coins such as Bitcoin have been the subject of great controversy alright. Last week Bitcoin slumped 20%, the most since last March’s pandemic-induced selloff, after earlier soaring to record levels above $58,000. Bill Gates, who is of course a billionaire as well, recently threw cold water on retail investors looking to become the next Elon Musk — the world’s richest crypto aficionado — by buying the digital currency.

Loeb’s comments were in response to a blog post titled “NFTs and a Thousand True Fans” by Chris Dixon, a general partner at the venture-capital firm Andreessen Horowitz. In Dixon’s post, he expounds upon the role that non-fungible tokens will have on digital creators.

NFTs and a Thousand True Fans https://t.co/III9SMl75X pic.twitter.com/lwzbQMknoL

— Chris Dixon (@cdixon) February 27, 2021

ICO Volume in 2018 Already Double that of Previous Year

According to a joint report from consulting firm PwC and the Swiss Crypto Valley Association, Initial Coin Offerings (ICOs) are booming despite the price collapse of cryptocurrencies, Cointelegraph auf Deutsch reports today, June 29. PwC found that ICO volume reached new record highs in the first half of 2018.

Per the report, between January and May 2018 alone, ICO volume is already twice as much as it was during the entire year of 2017. PwC Switzerland writes in an accompanying press release:

“In total, 537 ICOs with a total volume of more than $13.7 billion have been registered since the beginning of the year. In comparison, in 2017 there were a total of 552 ICOs with a volume of just over $7.0 billion. Also, the average size of an ICO has almost doubled from $12.8 million to over $25.5 million since last year. ”

Special mention is made of the ICOs of Telegram and EOS, which reached into the billions. Telegram raised $1.7 billion through its ICO, while EOS raised over twice as much at $4.1 billion.

According to the ICO report, the U.S., Singapore, and Switzerland are now the three most important ICO hubs worldwide, largely due to progress in regulation. Switzerland in particular benefits from the ‘Crypto Valley’ of Zug with its consistent focus on blockchain and fintech startups. Smaller countries and city states such as Hong Kong, Gibraltar, Malta or Liechtenstein have seen some success, having copied the crypto-friendly models of Singapore and Switzerland.

Regarding regulation, the authors identified three different approaches that are currently being implemented worldwide:

“The US uses a centralized system in which all tokens offered by ICO are traded as securities. In Europe, on the other hand, a differentiated regulation prevails. FINMA, for example, classifies tokens into three sub-types: asset, payment and utility tokens, which do not constitute an actual investment but allow the buyer direct access to the product or service of the ICO. Finally, in Asia, regulation is very heterogeneous, ranging from strict prohibition to active promotion of ICO projects. ”

Regulators and traditional financial institutions remain skeptical of ICOs, and have criticized their lack of oversight in certain jurisdictions. Nasdaq CEO Adena Friedman recently claimed that ICOs pose “serious risks” to retail investors due to regulatory shortcomings. Earlier this month, SEC chairman Jay Clayton reiterated the agency’s position that ICOs are securities and should be regulated as such.

Updated: 3-2-2021

Dan Loeb’s Hedge Fund Hires Pro-Crypto Goldman Sachs Analyst

Heath Terry has said it would be “hard to see a world where blockchain technology doesn’t change the way we think about asset ownership.”

A research analyst from Goldman Sachs who has previously spoken favorably about Bitcoin and blockchain technology will reportedly be joining New York-based asset management firm Third Point.

According to a Reuters report on Tuesday, Third Point hired Heath Terry, a managing director of Goldman Sachs’ tech division. He has been with the investment firm for 10 years and will reportedly become part of Third Point’s team handling venture investments.

Terry has previously spoken about Bitcoin (BTC) prior to the 2017 bull run, predicting the crypto asset was “going to mature” and would likely see more use cases. He said it would be “hard to see a world where blockchain technology doesn’t change the way we think about asset ownership.”

The addition of the seemingly pro-crypto Goldman Sachs executive to the multibillion-dollar hedge fund follows CEO Dan Loeb announcing on Monday that he had been “doing a deep dive into crypto” and implying he is looking into ways to bridge the gap between traditional finance and the crypto space. Some estimates put Third Point’s assets under management between $15 billion and $20 billion.

Loeb’s potential inclusion in crypto as a prominent Wall Street investor — his personal net worth is more than $3 billion — had some speculating he could pave the way for others still hesitant about the technology and what it means for traditional finance. Already, his announcement appears to have convinced Shark Tank star Kevin O’Leary, who said Tuesday he would be allocating 3% of his portfolio to Bitcoin.

Top 10 Cryptocurrency Hedge Funds

Cryptocurrency hedge funds are investment vehicles where money is pooled together to be invested in assets or projects related to cryptocurrencies and blockchain technologies.

For instance, cryptocurrency hedge funds may invest Bitcoin, Ethereum, Ripple, Litecoin and other major cryptos directly or buy altcoins during ICOs and pre-ICO sales. Crypto hedge funds can also invest in emerging blockchain startups or in companies that benefit from crypto boom like manufacturers of graphics cards.

A firm can use use such a fund as part of its total asset portfolio that includes traditional assets, in order to offer those investing in traditional assets exposure to crypto assets and help them to further diversify investments.

Crypto hedge funds, which are different from crypto index funds, have grown from only 37 in the beginning of 2017 to over 226 as of February 2018 and together, they have over $3.5 billion in assets under management (AUM).

Many people, particularly the risk-averse investors, may choose to invest in crypto hedge funds because this way, they can get profits without the need to buy and hold tokens and coins and do trading themselves. So crypto hedge funds are yours for consideration if you love crypto or looking for profits but do not have the time to engage in trading yourself, or are busy with other things.

These hedge funds are managed by a team of expert investors who research markets and carry out in-depth analyses with the aim of determining where to direct their investments — obviously where there is more potential for earning more profits. At the end of the day, the investors will receive profits from the market strategies employed and implemented by the fund managers.

Below are the top crypto hedge funds that you can consider if in the process of deciding which you could invest in. They basically come in two types: those than manage portfolios containing exclusively cryptocurrency and those that add cryptocurrency to a mix of other asset types. The third recent type is the fund of hedge funds type that exposes investors to a multiple of other hedge funds from a single investment vehicle.

1. Pantera Capital

Panthera capital is a crypto hedge fund that also acts as a venture capital backer to Bitcoin or crypto startups. It has attracted investment from institutional investors such as Fortress Investment Group and venture capital firms Benchmark Capital and Ribbit Capital among others.

From its list of portfolio, the firm invests in a mixture of assets including cryptocurrencies such as Bitcoin, Ox, FunFair, Omise and Civic; startups such as BitPesa, BitOasis, Center.io, and BTCjam; and exchanges such as Bitstamp, Kraken and Poloniex.

The crypto hedge funds attracted much attention by returning 25,000 percent over its lifetime through the end of last year, but saw a 45.7 percent reduction in its fund for the month of March alone this year.

Currently, they are managing over $700mm across two venture funds and five cryptocurrency funds (Venture Fund III, Digital Asset Fund, ICO Fund, Bitcoin Fund and Long-Term ICO Fund). It is open to accredited investors seeking to invest $100,000 or more in digital assets or blockchain-enabled companies and hence most suitable for institutional investors.

The firm was founded in 2013 by Dan Morehead, the then chief financial officer and head of Macro Trading at Tiger Management, and focused on global macro hedge fund investments until 2014.

2. PolyChain Capital

Polychain Capital lets investors earn returns by actively managing portfolios of blockchain assets. It invests digital assets at the Protocol Layer, not at the App layer.

The hedge fund, which is also suitable for institutional investors, targets investments in Ethereum innovations, IPFS ecosystem, Tezos, Rchain, Polka, DotDifinity and Cosmos among many other prptocol-layer tech.

3. CoinCapital

New York-based-CoinCapital crypto hedge fund which helps investors to diversify across strategies, investment styles, and managers in addition to cryptocurrencies. This is by investing in variety of blockchain start-ups, ICOs and cryptocurrencies for the benefit of its investors.

The company is open for investment from individual investors, blockchain startups and institutions as well. Currently, the fund manages over 40 cryptocurrencies including popular coins such as Bitcoin, Ethereum, Litecoin, Dash, Bitcoin Cash and Ripple.

The fund is managed by a team that has finance, marketing and sales background. Samuel Cahn, who heads the team, is also former manager at Arbitrage Fund.

4. Bitcoins Reserve

Bitcoins Reserve, in addition to providing other services, runs the Arbitrage fund, which performs automated crypto trading across different cryptocurrency exchanges with price differentials to correct market inefficiencies and bring more liquidity. The firm also works with a number of retail exchanges and OTC traders to provide procurement services, providing emergency liquidity when a larger than expected buy or sell orders are beyond the target firm’s capacity to service.

The Arbitrage Fund falls under the firm’s Cryptocurrency Arbitrage service, which targets arbitraging opportunities in crypto investments. It allows investors to take advantage of market inefficiencies through arbitrage activities. Their automated cryptocurrency trading engine performs high frequency statistical arbitrage. It will analyze the historical price/volume/order depth relationships between major Bitcoin exchanges. It then performs simultaneous trades when the value deviates from historic mean in certain ways until the values return to historical mean.

The arbitrage exchanges include Bitstamp, BTCChina, OKCoin and Huobi.

The company also runs Bitcoins 101, which is an educational initiative.

Bitcoins Reserve is headed by Sam He, who has Strategy Director background in the Financial Services industry; and Kai Shi, a data analyst who is also a financial analysts with a postgraduate degree in Master of Applied Finance and a Bachelor degree in Accounting and Finance from Monash University. The board of directors includes Pierre Boutros, managing director at Millennius; Gordon Lee, a Managing Partner at Caricom Oil; and Dallas Brooks, a director at National Wealth.

Other services include merchant services, creation of cryptocurrency, insured cold storage, and analytics for cryptocurrencies.

5. Binary Financial

Binary Financial is a U.S.-based hedge fund that invests in Bitcoin transactions and other investment activities such as proprietary trading of crypto currency and industrial mining.

It specializes in large block trades for high net worth clients and institutions, and offers over the counter trading services to qualified clients in buying and selling of BTC. It also acts as an electronic market making through the BitGo platform.

Through the BTC-OQ concierge Bitcoin liquidity service, institutional clients and high net worth individuals are able to gain exposure to the Bitcoin asset class for profits.

6. Bitspread

Bitspread uses quantitative trading software that connects blockchain asset exchanges to let Investment Managers to trade and risk-manage blockchain assets. It uses a number of trading strategies to generate alpha and beta returns on blockchain assets.

For instance, the Market Neutral Liquidity Alpha Volatility is a strategy that generates impressive returns while helping with exposure on blockchain assets — it uses market arbitrage to shield from the market price depreciation and appreciation.

The Blockchain Wealth Active growth Alpha Picking strategy aims at exposing clients on a basket of selected blockchain assets in order to get profits linked with the price of the assets in the basket in question.

Blockchain Market Capitalization Tracker Alpha Picking strategy exposes fund managers to a basket of selected blockchain assets on a long term, and therefore to appreciation in prices of this basket.

Blockchain Market Capitalization Tracker Beta Exposure strategy also provides investors with a basket of the 5 biggest blockchain assets according to market capitalization. This basket will be re-balanced on a monthly basis.

The Blockchain Airdrop Event Driven Alpha Event Driven strategy aims at helping to managing and monetizing digital currencies received for free as a result of blockchain forks.

The Blockchain Big Data Prediction Alpha Big Data strategy relies on a military special force market intelligence team, who are also expert in big data, to get analyses that assist to anticipate and capitalize on market movements.

The Blockchain Private Equity Alpha Private Equity strategy capitalizes and centralizes and decentralized emerging exchanges offering blockchain assets.

7. Bitbull

Bitbull is a crypto fund of funds based in “San Francisco-based cryptocurrency fund” started in the year 2016. The crypto project is part of the Stanford’s StartX startup incubator headed by Joe DiPasquale, who is well known in the crypto world and associated with a wide variety of blockchain ventures such as ReGroup.

Bitbull allows investors to avoid the tedious job of having to search for profitable and appropriate crypto hedge funds that they can invest in. That itself can be a challenge because there are more than 200 different funds out there each with different features.

Secondly, you are able to invest in multiple funds on a single platform and spread the risks. You do not have to limit yourself to index funds because the options offered vary from early-stage and venture capital style investment, to pure quantitative and arbitrage.

The fund has zero percent management fee but it accepts investments from qualified clients and their minimum investment stands at $100,000 USD. Elite funds often charge $1 million or more. IRAs are also accepted.

8. CoinFund

CoinFund was launched on July 2015 and therefore one of the earliest cryptofunds, and it focuses on investments in cryptocurrencies, cryptoassets, and decentralized technologies. The fund comprises of variety of vehicles (over 20) of different elements, including Ether Holdings, Steem Power, Augur REP, Bitcoin Capital,

Its team members are of multidisciplinary background across the fields of technology, computer science, finance, economics, quantitative research, psychology, and law. The team members also have experience from Goldman Sachs, Amazon.com, American Capital, Kirkland & Ellis, and the MIT Digital Currency Initiative, among others.

9. Blackmoon

Blackmoon acts as a framework for tokenized funds to provide investment opportunities in both the real world and crypto economies. Therefore, with it, investors are able to diversify their income sources while retaining the good of crypto universe including transparency, decentralization, trade-ability, and cost efficiency.

The platform facilitates the creation of tokens where the token issuer will create and distribute asset tokens in exchange for contributions in cryptocurrencies.

The contributions are then accumulated by the token issuer who will then convert the contributions to the Fund’s base currency and the base currency is transferred to the fund for purchase of the Fund’s shares.

10. Atronaut Capital

Astronaut Capital is a fund that provides investors exposure to invest in ICOs that have highest potential to grow. Their investment strategy is based on research of ICOs through its own independent research team Picolo Research. Token holders also benefit from this research and different portfolio tools.

The project has recently launched an ICO that lets investors to earn quarterly income bonuses and achieve capital gains.

The token will provide investors a gateway to a managed portfolio targeting high volume and high demand crypto startups.

Updated: 7-27-2020

Tetras Capital Shuts Down Crypto Hedge Fund After 75% Loss

Cryptocurrency hedge fund Tetras Capital is calling it quits.

* The New York-based fund is shutting down and returning investors’ money after quarters of low returns, according to a person with direct knowledge of the matter who spoke to CoinDesk on condition of anonymity.

* The fund struggled to perform and posted about a 75% loss life-to-date since opening in 2017, the source said.

* Tetras Capital managed upwards of $33 million at one point for more than 60 investors who pitched in at least $100,000 apiece, according to financial filings.

Tetras Capital’s closure adds to a growing line of cryptocurrency hedge funds folding after crypto prices slid from peak highs in 2017.

* According to a Crypto Fund Research report, at least 68 crypto hedge funds closed last year internationally, almost double the number – 35 – in 2018.

The fund launched in 2017 with a focus on altcoins, Tetras Capital co-founder Alex Sunnarborg said in a 2019 Forbes interview.

* Alternative cryptocurrencies, or altcoins, are digital assets other than bitcoin.

* One altcoin trade Tetras claimed to have made was a short position on the cryptocurrency ether at a price of $700 in May 2018, according to the interview and a fund investment report.

* The short view appears to have been the right call, as ether tumbled below $100 last year and has lately been trading in the $200 range.

* Sunnarborg, a former Raymond James and CoinDesk analyst who sold crypto-asset market research app Lawnmower to this news publication, managed Tetras Capital with partners Brendan Bernstein and Thomas Garrambone.

* Bernstein and Garrambone have worked as analysts for a number of investment banks, including Goldman Sachs, JPMorgan, Deutsche Bank and Torreya Partners.

Updated: 8-3-2020

Crypto Hedge Fund Neural Capital Closes After Losing Half Its Money

Neural Capital, a hedge fund that traded cryptocurrency assets, has quietly shuttered.

* The fund has lost half its money since launching in 2017 and is in the process of refunding leftover money to investors, according to three people familiar with the matter who asked not to be identified.

* The sources said the fund’s crypto-assets were liquidated in December and some cash is still being held up in escrow, months longer than expected.

* By 2019, Neural Capital managed over $13 million that drew investments of $250,000 on up from over 40 investors, including Greylock partner Joshua Elman and Expa partner Hooman Radfar, according to financial records.

* The fund withdrew its registration with the U.S. Securities and Exchange Commission in December and stopped submitting obligatory filings to the state of California and the federal agency this year.

* It joins a horde of funds to close in 2020, shy of the three-year mark, after forming around the time of the crypto boom of 2017 — notably, Adaptive Capital, Prime Factor Capital and Tetras Capital.

The fund’s managers, Arij “Ari” Nazir and Christopher Keshian, were new to the hedge fund industry and involved in more than one fund when they started Neural Capital.

* Nazir was a University of Virginia master’s student who interned for the White House in the spring of 2015 during Barack Obama’s second presidential term.

* Keshian, who graduated from the University of Virginia’s business school with Nazir in 2015, was chief executive officer of Decentralized Capital Corporation, a Panamanian fiat-to-crypto money transmitter, until 2017.

* While managing the fund, Nazir and Keshian were advisors of Protocol Ventures, an institutional investor in multiple cryptocurrency funds that included Neural Capital, whose logo has been removed from Protocol’s website.

* Keshian also started Apex Capital, a Protocol-like crypto fund-of-funds, with Joseph M. Bradley, Neural Capital’s head of investor relations, as they were getting Neural Capital off the ground. Apex Capital failed to launch after unsuccessfully attempting to raise $100 million in assets through a digital token sale to meet minimum invested fund amount requirements.

* Keshian had a falling-out with Nazir and left Neural Capital by 2019, according to the sources.

Keshian told CoinDesk he has not kept in touch with Nazir since parting from Neural Capital. “Right now, I’m working on a project that is still very much under wraps,” said Keshian, declining to comment further.

Nazir did not respond to requests for comment.

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